Contra-accounts are used to decrease the original value of the account they offset. They have a normal balance opposite to the account they offset (e.g. contra-asset accounts like accumulated depreciation have a normal credit balance and offset the debit balance of the related asset account). Contra-accounts always appear in the opposite column of the trial balance from the account they offset.

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Contra-Accounts

Question 49

Multiple Choice

Contra-accounts:

A) are used to increase the original value of the account they offset.
B) always appear in the same column of the trial balance as the account they offset.
C) are used to decrease the original value of the account they offset.
D) reduce the asset to its fair value.

Correct Answer: