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Contra accounts are accounts that are related, yet separate from its particular account. [7] A contra expense account will behave in the opposite way a normal expense account will; instead of debiting to increase, a contra account must credit to increase. [7] Instead of crediting to decrease, it will be credited to increase. [7] An example of a ...
United States GAAP utilizes the term contra for specific accounts only and does not recognize the second half of a transaction as a contra, thus the term is restricted to accounts that are related. For example, sales returns and allowance and sales discounts are contra revenues with respect to sales, as the balance of each contra (a debit) is ...
Contra-accounts are accounts with negative balances that offset other balance sheet accounts. Examples are accumulated depreciation (offset against fixed assets), and the allowance for bad debts (offset against accounts receivable). Deferred interest is also offset against receivables rather than being classified as a liability. Contra accounts ...
However, there are instances of accounts, known as contra-accounts, which have a normal balance opposite that listed above. Examples include: Contra-asset accounts (such as accumulated depreciation and allowances for bad debt or obsolete inventory) Contra-revenue accounts (such as sales allowances) Contra-equity accounts (such as treasury stock)
The deferred gross profit is an A/R contra-account and is the difference between gross profit and recognized income and is calculated as follows: $360,000 − $90,000 = $270,000. The deferred gross profit is thus deferred and recognized in income in subsequent periods, i.e. when the installment receivables are collected in cash.
Normal Balances refer to whether the balance for an account in a properly-formed trial balance is usually a debt or a credit. A normal balance also reflects the accounting equation. If a trial balance for an account is reversed, such an account is called a "contra-account" (e.g. accumulated depreciation as an asset or owners drawings as equity ...
Turkey Cheese Ball. Even if you're not serving turkey this Thanksgiving doesn't mean you can't get in on the theme. Enter: this adorable cheeseball.We used carrots, pecans, pretzels, and bell ...
The account's net balance is the difference between the total of the debits and the total of the credits. This can be a net debit balance when the total debits are greater, or a net credit balance when the total credits are greater. By convention, one of these is the normal balance type for each account according to its category.