True or false. A contra account is an account whose balance is added from an associated...

Question

Question

True or false. A contra account is an account whose balance is added from an associated account in the financial statements

Answer 1

Answer #1

Answer

--The statement is actually FALSE.

--Contra Accounts are those accounts, the balance of which are DEDUCTED (not added) from the respective associated account.

--For example, Accumulated Depreciation account is a 'contra asset' account and is shown as a deduction from the Asset's balance it pertains to.

Answer 2

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