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?
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