A contra asset account is subtracted from a related asset account in the statement of financial position and has a normal credit balance.

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A contra asset account is indeed subtracted from a related asset account on the balance sheet (statement of financial position) and typically carries a credit balance, which is opposite to the debit balance that regular asset accounts have. Examples include accumulated depreciation and allowance for doubtful accounts.

A Contra Asset Account Is Subtracted from a Related Asset