Answer Posted / sunil kumar tyagi
contra account is a account that offset that related
account.the basic function of contra account is basically
to be an opposite of another account.for example a account
showing a dedit is a contra account known as contra
liability account.similarily a account showing a credit is
a contra account known as contra liability account.for
example if an asset has been amortized then decrease in the
value of asset will be compensated by the ammortized value
accont which is a cotra account ot it. In order to balance
the debit position associated with the amortization, an
opposite or contra account with the balance sheet structure
will represent a credit that essentially offsets the
amortized figure. This helps to maintain a balance between
debits and credits in the bookkeeping process
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