What is Contra Account
Contra Account is the reversal or deduction on different Kinds / Types of Accounts . It may be an estimation or actual amount deducted from accounts. There are five types of Contra Accounts. 1. Contra Asset Account The most widely and famous type is Contra Asset Account. It is estimated on Assets and deducted from the Closing Balances of Relevant Asset on Balance Sheet . Examples are Accumulated Depreciation , Allowance For Doubtful Accounts . 2. Contra Liabilities Account It is used to deduct the balance of relevant Liabilities on Balance Sheet. Example is Discou nt on Loan Payable Account, etc. 3. Contra Equity Account It is the reversal from Equity Account of the business. Examples are Owner's Drawings Account in case of Sole Proprietorship and Dividend Account in case of Company and Treasury Stock Account in case of Corporations (Larger Business Organizations). Drawings Account is deducted from closing bal...