Is a Contra Account an Expense?
A Contra Expense Account Is a General Ledger Expense Account That Is Expected to Have a Credit Balance Instead of the Usual Debit Balance. Another Description...
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Correspondingly, what type of account is a contra account?
A contra account is a general ledger account with a balance that is opposite of the normal balance for that account classification. The use of a contra account allows a company to report the original amount and also report a reduction so that the net amount will also be reported.
One may also ask, are discounts considered an expense? Definition of Sales Discounts Sales discounts (along with sales returns and allowances) are deducted from gross sales to arrive at the company's net sales. Hence, the general ledger account Sales Discounts is a contra revenue account. Sales discounts are not reported as an expense.
Beside this, is a contra revenue account an expense?
Contra revenue. Contra revenue is a deduction from the gross revenue reported by a business, which results in net revenue. Contra revenue transactions are recorded in one or more contra revenue accounts, which usually have a debit balance (as opposed to the credit balance in the typical revenue account).
Is a contra account a debit or credit?
A contra asset account is an asset account where the account balance is a credit balance. It is described as "contra" because having a credit balance in an asset account is contrary to the normal or expected debit balance. (A debit balance in a contra asset account will violate the cost principle.)
