What is Defective output (rejects)?
Also known as: faulty products
Products that do not meet quality requirements. The costs of correcting them and losses from rejects that cannot be corrected are accumulated in account 2610; after deducting the amount recoverable from the person at fault and the value of usable remnants, the rest is transferred to the cost of production. Warranty repair costs are also recorded in this account (NAS No. 21, paragraph 131).