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A contra Asset is an Asset account where the balance will be either credit or zero balance.
Cost principles will be violated if the balance is debit.
The most common example of contra asset is Accumulated Depreciation, Accumulated Dep is related to Property plant and equipment and separately allow the readers to see how much cost of Property plant and equipment is depreciated.
A contra asset is a negative asset account that offsets the balance in the asset account with which it is paired. The purpose of a contra asset account is to store a reserve that reduces the balance in the paired account. ... Contra assets may be stated in separate line items on the balance sheet.
A balance sheet account in the financial statement that offsets a related asset account Contra asset accounts are subtracted from a related asset account since asset accounts have debit balance while contra assets have credit balances. For instance, the contra asset account’Allowance for doubtful accounts is deducted from the asset accounts receivable to arrive at a net amount which is referred to as net or book value
Contra Asset means Negative Asset that is reported to offset the balance of an asset or asset account. Accumulated Depreciation account is the contra asset account that will be in credit balance but offsetting the Cost value of the asset to get the Net Book value of the asset.
