Contra Accounts Examples & How They Work

what is a contra

Excess, stored inventory will near the end of its lifespan at some point and, in turn, result in expired or unsellable goods. In this scenario, a write-down is recorded to the reserve for obsolete inventory. Allowance for doubtful accounts (ADA) is a contra asset account used to create an allowance for customers who are not expected to pay the money owed for purchased goods or services. The allowance for doubtful accounts appears on the balance sheet and reduces the amount of receivables.

  1. The NES version was also a critical and commercial success, with Electronic Gaming Monthly awarding it for being the Best Action Game of 1988.
  2. Now anytime you want to search the web, know the weather forecast, or get the baseball scores from last night, all you have to do is say “Hey, Cortana,” and ask your question.
  3. The final four stages of the NES version (the Snowfield, Energy Zone, Hangar, and Alien Lair) are based on the different areas featured in the arcade version’s final stage.
  4. The Spread Gun is not featured in this version, replaced by the Rear Gun similar to the tailgun in Gradius II, which fires in two directions at the same time.

Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI’s full course catalog and accredited Certification Programs. Master accounting topics that pose a particular challenge to finance professionals. We can see how the $10,000 allowance for doubtful accounts offsets the $100,000 A/R account from our illustrative example above (i.e. the account decreases the carrying value of A/R).

Contra asset accounts are recorded with a credit balance that decreases the balance of an asset. A key example of contra liabilities includes discounts on notes or bonds payable. Contra accounts are used to reduce the original account directly, keeping financial accounting records clean. The difference between an asset’s balance and the contra account asset balance is the book value.

When the jump button is pressed while crouching on a higher platform, the character will drop down to a lower level. A contra account is an entry on the general ledger with a balance contrary to the normal balance for that categorization (i.e. asset, liability, or equity). And if the player holds the select and start buttons during the credits sequence, a secret message will be displayed after the Konami logo. The power-up icons for the Machine Gun and Laser Gun were also changed and are now represented by letter-based falcon symbols (M and L) used by the other weapons. The Rapid Bullets and Barrier power-ups are also more common in this version, since unlike the arcade game, the flying item capsules now appear regardless of which weapon the player character currently possesses. The NES version introduces a seventh item that clears the screen of all on-screen enemies when obtained.

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However, that $1.4 billion is used to reduce the balance of gross accounts receivable. Therefore, contra accounts, though they represent a positive amount, are used to net reduce a gross amount. For this reason, contra accounts are primarily 4 best monthly financial management report template seen as having negative balances because they are used to reduce the balance of another account. Some of the most common contra assets include accumulated depreciation, allowance for doubtful accounts, and reserve for obsolete inventory.

what is a contra

The allowance for doubtful accounts – often called a “bad debt reserve” – would be considered a contra asset since it causes the accounts receivable (A/R) balance to decline. The difference between an asset’s account balance and the contra account balance is known as the book value. A debit will be made to the bad debt expense for $4,000 to balance the journal entry. Although the accounts receivable is not due in September, the company still has to report credit losses of $4,000 as bad debts expense in its income statement for the month.

This type of account could be called the allowance for doubtful accounts or a bad debt reserve. The balance in the allowance for doubtful accounts represents the dollar amount of the current accounts receivable balance that is expected to be uncollectible. The amount is reported on the balance sheet in the asset section immediately below accounts receivable.

Contra Account Definition, Types, and Example

This version was produced in-house by Konami, and features several differences from the arcade release in order to better suit the NES’s hardware. The arcade game was a commercial success worldwide, becoming one of the top four highest-grossing dedicated arcade games of 1987 in the United States. The NES version was also a critical and commercial success, with Electronic Gaming Monthly awarding it for being the Best Action Game of 1988. A contra account enables a company to report the original amount while also reporting the appropriate downward adjustment. Get instant access to video lessons taught by experienced investment bankers.

The game can be played by one or two players, but due to the graphical limitations of the NES, Bill and Lance lost their individualized character designs. Instead, they are both depicted as shirtless commandos distinguished by the colors of their pants (blue for Bill and red for Lance). When one https://www.bookkeeping-reviews.com/balance-sheet-definition-example-elements-of-a/ player loses all of their lives, they are given the option to use the other player’s stock to keep fighting. The player must fight a giant alien head that spawns larvae from its mouth before reaching the final target, a cardiac creature that must be destroyed in order to complete the mission.

During side view stages, the player can shoot leftward, rightward or upward while standing, as well as horizontally and diagonally while running. The player can also shoot in any of eight directions, including downwards, while jumping. Pressing the joystick downwards while standing will cause the character to lie down on his stomach, allowing him to avoid enemy fire and shoot low targets.

Now anytime you want to search the web, know the weather forecast, or get the baseball scores from last night, all you have to do is say “Hey, Cortana,” and ask your question.

Contra Account

Examples of fixed assets include buildings, machinery, office equipment, furniture, vehicles, etc. The accumulated depreciation account appears on the balance sheet and reduces the gross amount of fixed assets. A contra liability is an account in which activity is recorded as a debit balance and is used to decrease the balance of a liability. It is not classified as a liability since it does not represent a future obligation. Normal asset accounts have a debit balance, while contra asset accounts are in a credit balance.

Stages 1 through 6 are drawn directly from the arcade version, whereas Stages 7 through 9 are based on the different areas featured in the final stage of the arcade version in a matter similar to the final four stages of the NES version. Stages 10 through 19 are new to this version and take place primarily in an underground facility underneath the Galuga Archipelago. Inputting the code at the title screen starts the player with thirty lives instead of the usual three.

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