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Dear All,
I am struggling with a topic that has become detrimental for my career.
Contra Accounts:
Every bit of research i have done suggests that contra acocunts are the opposite of main account. Like Asset (main account) Depreciation (Contra account) or Sales (Main account) returns (Contra account).
another contra treatment is if one individual is both a supplier and your customer and therefore you do a suspense account entry to contra common balances.
Now cheif accountant do agree with the second bit but he has completely rejected the fact that depreciation is contra account.
can anyone please shed some light on it or direct me to specific standard ?
“Every bit of research i have done suggests that contra acocunts are the opposite of main account. Like Asset (main account) Depreciation (Contra account) or Sales (Main account) returns (Contra account).”
This is absolutely correct however: you should clarify with the chief accountant as to which depreciation account you are referring. Depreciation expense is not a contra account. Accumulated depreciation is a contra account. When you are making your monthly depreciation entries, you should be debiting the depreciation expense account and crediting accumulated depreciation.
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