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A Contra Asset Account Is Subtracted from a Related Account

question 189

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A contra asset account is subtracted from a related account in the statement of financial position.


Definitions:

Credits

Accounting entries that increase liabilities or equity or decrease assets or expenses.

Account Balances

The amounts in financial accounts, representing the net value at a particular point in time after accounting for all debits and credits.

Asset Accounts

These accounts on the balance sheet represent the resources owned or controlled by a business, which provide future economic benefits.

Revenue Accounts

Accounts that track the income generated by a company from its normal business operations, such as sales of goods or services.

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