What is an example of a contra account?

A major example of a contra account is the accumulated depreciation. Again, accumulated depreciation reduced fixed and capital asset balances. Apple breaks out its amount of property, plant, and equipment (PP&E) and then lists its accumulated deprecation that reduces the PP&E figure.

What is contra owner’s equity?

An owner’s or stockholders’ equity account with a debit balance instead of the normal credit balance. Examples include the owner’s drawing account, a dividend account, and the treasury stock account.

What are contra assets?

A contra asset is a negative asset account that offsets the asset account with which it is paired. The purpose of a contra asset account is to store a reserve that reduces the balance in the paired account.

What is contra asset and Contra liabilities?

If the related account is an asset account, then a contra asset account is used to offset it with a credit balance. If the related account is a liability account, then a contra liability account is used to offset it with a debit balance.

What is contra owners equity?

contra equity account definition. An owner’s or stockholders’ equity account with a debit balance instead of the normal credit balance. Examples include the owner’s drawing account, a dividend account, and the treasury stock account.

Which is an example of a contra asset?

Contra Account Understanding Contra Accounts. Contra accounts are reported on the same financial statement as the associated account. Recording Contra Accounts. When a contra asset account is first recorded in a journal entry, the offset is to an expense. Examples of Contra Accounts.

What is a contra stockholders’ equity account?

A contra equity account is a stockholders’ equity account with a negative balance. This means that the account has a net debit balance. This account reduces the total amount of equity held by a business. Examples of contra equity accounts are: Treasury stock (reflects the amount paid by a business to buy back shares…

What are contra asset accounts?

Definition of Contra Asset Account. A contra asset account is an asset account where the account balance is a credit balance. It is described as “contra” because having a credit balance in an asset account is contrary to the normal or expected debit balance.