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What kind of transactions increases contra-asset accounts? What kind of transactions decrease contra-asset accounts?

What kind of transactions increases contra-asset accounts? What kind of transactions decrease contra-asset accounts?

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Answer #1

Contra Asset is an Asset which has an credit balance for example Accumlated Depreciation , Allowance for Bad Debt and E.t.c.

Any Expense Charged on Asset and it is paired with Contra Asset then in that case Contra Asset will Increase instead of Decrease in Asset.

For Eg:- Depreciation Charged on Asset will increase the Accumlated Depreciation.

Any Income Received on Asset and it is paired with Contra Asset then in that case Contra Asset will decreasre .

For Eg;- Sale of an Asset will decrease or vanish the Accumlated Depreciation Account .

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