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Contra account is really confusing me~ Need help~

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Contra account is really confusing me~ Need help~

I dont understand " contra against debit balances in receivables ledger" and " contra against credit balances in payables ledger" mean and where should i credit or debit in payable and receivable T account? please is there any excellent student to help me?

March 16th 2016 AN ACCA USER 180 Points

1 Reply

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First of all, note that the supplier is the customer (receiveable and the payable)in contra entry. It is advisable that you offset the balances.

Eg you owe me 100 and I owe you 200

The double entry will be

Payable 100 Dr
Receiveable 100 Cr

April 26th 2016 AN ACCA USER 210 Points
Edited April 26th 2016 AN ACCA USER
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