Which of the following is an example of a contra account?
A)Merchandise Inventory
B)Accounts Payable
C)Cost of Goods Sold
D)Accumulated Depreciation
E)Deferred income taxes payable

Question

Quizplus · Accepted Answer

Accumulated Depreciation is an example of a contra account because it is subtracted from the related asset account, such as Equipment or Buildings, on the balance sheet to determine the net value of the asset. Contra accounts have opposite balances to their related accounts and are used to reduce the gross amount of the related account.

Which of the Following Is an Example of a Contra