A contra asset account is an asset account with a natural credit balance. ACCUMULATED DEPRECIATION– This type of contra asset account is commonly used to keep track of properties, plants, and equipment’s value. Nearly all asset accounts have a natural debit balance. Asset accounts are referred to as permanent or real accounts since they are not closed at the end of the accounting year. This account offsets a company’s accounts receivable account. This account decreases the fixed asset carrying balance. sales income records the full amount of sales (credits) sales income discount (a contra account) records discounts given (debits) so … The contra asset account, accumulated depreciation, is always a credit balance. An example of this is accumulated depreciation. A contra asset is an account that carries a natural credit balance even though most assets have a normal debit balance. Contra Liability Account: A liability account that is debited in order to offset a credit to another liability account. Contra asset accounts are the opposite of asset accounts. Contra Asset Account Examples . A contra asset account is a type of counter account that is used to adjust the debit balance of the main asset account. Allowance for doubtful accounts – Allowance for doubtful accounts is the percentage of bad debts that are estimated from the Accounts receivable account. Contra equity account – for example, owner’s drawings account, treasury stock account Assets represent items a company owns and uses during business operations, such as cash, inventory, and prepaid expenses along with buildings, vehicles, and land.In the accounting equation — assets equal liabilities plus owners' equity — … Allowance for uncollectible accounts, or allowance for doubtful accounts, is one of the most common contra current asset accounts. The Allowance for Doubtful Accounts is directly related to the asset account entitled Accounts Receivable. The outstanding balance of a contra asset account represents a credit figure. These accounts are maintained individually and are adjusted from the corresponding asset’s balance to show the net amount of the assets in financial statements. Asset Accounts Are Permanent or Real Accounts. One premise of accounting is that an asset’s value must be recorded, starting from when it was initially purchased up to the current time. Examples of Contra Asset Accounts. Two asset accounts, Allowance for Doubtful Accounts and Accumulated Depreciation, are known as contra asset accounts since these accounts are expected to have credit balances. Contra Asset Account – A contra asset account is an asset that carries a credit balance and is used to decrease the balance of another asset on the balance. The dollar balance in the allowance for uncollectible accounts is the amount you don’t expect to collect, and this offsets the amount you report in accounts receivable. Contra expenses accounts are commonly encountered, however, a business can also have other forms of contra accounts including: Contra asset account – for example, depreciation, allowance for doubtful debts. These contra accounts examples include. a contra account is an account that typically carries the opposite balance of that type of account . ; Accumulated Depreciation – Depreciation is the reduction in the value of an asset. This account is paired with and offsets another asset account, so that a net balance is reported on the balance sheet. … Contra asset accounts. 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