Definition, Meaning & Synonyms

contra-account

Noun

/ˈkɒn.trə əˈkaʊnt/

Definition

A contra-account is an account that offsets the balance of another related account in financial accounting, allowing for a clearer understanding of a company’s finances.

Examples

The accumulated depreciation is recorded in a contra-account against the asset’s book value.
In the balance sheet, the contra-account for accounts receivable reduces the total amount owed to the company.
Using a contra-account can improve financial analysis by highlighting the actual worth of an asset.