BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Normal asset accounts have a debit balance, while contra asset accounts are in a credit balance.

Detailed explanation-2: -A contra expense account is a general ledger expense account that will intentionally have a credit balance (instead of the debit balance that is typical for an expense account). In other words, this account’s credit balance is contrary to (or opposite of) the usual debit balance for an expense account.

Detailed explanation-3: -A contra account is a negative account that is netted from the balance of another account on the balance sheet. The two most common contra accounts are the allowance for doubtful accounts/bad debt reserve, which is subtracted from accounts receivable, and accumulated depreciation, which is subtracted from fixed assets.

Detailed explanation-4: -A contra asset is a negative account used in double-entry accounting to reduce the balance of a paired asset account in the general ledger. Learn why contra accounts, when utilized correctly along with a paired account, are a crucial component of accurate accounting and financial review.