An account used with a related account to bring about a decrease in the net amount of the two account balances is called a(n)
A) contra-account.
B) expense account.
C) adjusting account.
D) revenue account.

Question

Quizplus · Accepted Answer

A contra-account is used alongside another account to reduce the net amount of the balances. For example, an allowance for doubtful accounts is a contra-account used with accounts receivable to reduce the total amount of receivables. None of the other options listed (expense account, adjusting account, and revenue account) have the same purpose as a contra-account.

An Account Used with a Related Account to Bring About