A contra-account is an account that is an offset to,or reduction of,another account.For example,the contra-account,named Accumulated Depreciation,is like a negative asset account that is subtracted from the Equipment account in the assets section of the balance sheet.As such,in a trial balance,a contra-account appears in the opposite column as the account it offsets.

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A Contra-Account

Question 61

Multiple Choice

A contra-account:

A) increases the original value of the account to which it relates.
B) always appears in the same column of the trial balance as the account to which it relates.
C) offsets,or reduces,another account.
D) reduce the asset to its fair value.

Correct Answer: