---
title: Contra Accounts
description: A contra account is a general ledger account which is intended to reduce another account. This other account is often referred to as its paired account. The purpose of a contra account is to offset th
---

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# Contra Accounts

A contra account is a general ledger account which is intended to **reduce another account.** This other account is often referred to as its paired account.

The purpose of a contra account is to **offset the balance** of the paired account. The natural balance of a contra account is always the **opposite of the account with which it is paired.**

When you look at a financial statement you will see that a contra account sits directly below their paired accounts. 

A common example of a contra account is **Accumulated depreciation.** This account is a contra asset account as it offsets fixed asset accounts. The normal balance for an asset is a debit and the normal balance for accumulated depreciation is a credit.

Here are some more examples of contra accounts:

- Drawings (Equity)
- Doubtful debts (Asset)
- Discount on bonds payable (liability)
- Sales return (Revenue)
- Sales discount (Revenue)
- Sales allowance (Revenue)

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