The Contra account is the opposite of the normal account which is presented in the balance sheet. Normally, a contra account is created for an asset account such as provision for doubtful debt and allowance for depreciation. Both of these are contra accounts and are created for accounts receivable and fixed assets accounts respectively.

In order to keep the records clear and useable, the accountant has to keep certain types of figures separate from others. Because by doing this, he or she can later access the historical figures from the ledgers. However, over the face of the balance sheet, we only show the net balance, that is, we deduct the contra account balance with the related normal account and disclose the figure over the face of the balance sheet. However, we have to provide details in notes to accounts for a better understanding of the users of the financial statements.


There are varieties of examples but we are listing down very commons here:

  • Accumulated Depreciation/ Allowance for Depreciation
  • Provision for doubtful debt / Allowance for bad debts
  • Accumulated amortization account

Assets accounts are debited for any increase while in order to increase contra accounts balance, the accountant has to credit it by the relevant figure or amount.