Difference Between Contra Entry And Journal Entry

Contra Entry shows only effects of either two Different Nature or Types of Accounts or the same nature of accounts. It is a narrow term as it is one of the Types of Journal Entries while Journal Entry is a wider term which includes different types of Journal Entries like Adjusting Entries, Contra Entries, etc.

In Contra entry both aspects of a transaction is posted to concerned ledger at a time i.e., in Cash Book, cash account is written on cash column and bank account is written on bank column in the same ledger and both cancel each other in a same ledger while in a journal entry, both aspects of a transaction are not transferred to concerned ledgers at one place. For example, paid utility bill expense of Rs. 5900 is a cash transaction in which one account is a cash account which is posted to Cash book on credit side and other account is utility bill expense account which is debited to utility bill expense’ ledger.

Contra entry examples include cash deposited into bank or withdraw from bank, Allowance for Doubtful Accounts (Contra Asset Account), Accumulated Depreciation (Contra Asset Account) etc.

Journal Entry examples include Simple Entry and Compound Entry that we see in Opening Entries, Closing Entries, Adjusting Entries, Rectifying Entries, Reversing Entries, etc.