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It is better to say Contra is an adjustment entry, because it doesn't affect your Net Cash Balance.(whether cash in hand or bank, your current asset will be the same)
Following are the Transactions- to be accounted under the Contra.
* Cash deposited in the Bank,
* Cash Withdrawn from the Bank.
By Accounting Principle,
For, Cash Withdrawn from the Bank
Debit- What Comes in, - CASH
Credit- The Giver - BANK
For, Cash deposited in the Bank
DEBIT- THE RECEIVER - BANK
CREDIT- WHAT GOES OUT- CASH
NOTE:
1.Cash is the REAL A/c,
2.Bank is the PERSONAL A/c
In the dual entry accounting system, a Contra Entry is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, it will be recorded on the credit side and vice-versa. Debit and credit aspects of a single transaction are entered in the same account but in different columns. Each entry, in this case, is viewed as a contra entry of the other. Remember the word contra as “Against” or “Opposite”.