Which of the following is a distinguishing feature of a contra account?
A)If a contra account has a credit balance,then its companion account will usually have a debit balance.
B)If a contra account has a credit balance,then its companion account will usually have a credit balance.
C)A contra account usually has a dollar balance larger than its companion account.
D)Contra accounts are found only in the liability section of the balance sheet.
E)Contra accounts do not follow generally accepted accounting principles,while their companion accounts do follow generally accepted accounting principles.

Question

Quizplus · Accepted Answer

A distinguishing feature of a contra account is that if it has a credit balance, its companion account will usually have a debit balance. This is because contra accounts are used to reduce the balance of their companion account, and the opposite balance helps to distinguish the two accounts from one another.

Which of the Following Is a Distinguishing Feature of a Contra