What is a Contra Account?

Accounts are set up according to accounting subjects and have a certain format and structure, which are used to reflect the increase and decrease of accounting elements and their results.

[zhàng hù]

Accounts are set up according to accounting subjects and have a certain format and structure, which are used to reflect the increase and decrease of accounting elements and their results.

Chinese name

Account

Foreign name

Account

Pinyin

zhàng hù

Latin name

Lorem ipsum

Zhuyin

Bank account classification

Each account has a name to describe the economic content of the account calculation. The account is set up according to the account, so the name of the account must be consistent with the account. The name of the account is the name of the account. The accounting content specified in the account is the economic content that should be recorded in the account. Therefore, the account should be set up according to the classification of the account. If the company wants to open

Each account must be divided into at least two directions: one party registers the increase amount, and the other party registers the decrease amount, which is the basic structure of all accounts. In order to explain the problem, the basic structure of the account can be simplified to the left and right, that is, the most essential difference between the T-shaped accounts is the reflected economic content.

The account is divided into left and right directions.

The basic relationship is as follows:

Ending balance = opening balance + increase in the current period-decrease in the current period

For asset, cost, and expense accounts:

Ending balance = opening balance + debit balance in the period-credit balance in the period

For debt, owner's equity, and income accounts:

Closing balance = Beginning balance + Credit amount in the period-Debit amount in the period

So-called

Setting up an account serves two purposes.

Data transfer information

In the production and operation activities of an enterprise, very many things have their quantity performance. For accounting information systems, everything that is unconfirmed, classified by account, and formally recorded can be considered data. The original boundary that distinguishes data into accounting and non-accounting information is the account.

quality improvement

Enterprises generate thousands of data that must be recorded through accounting every day. Accounts can classify, merge, summarize, organize, and process single, large amounts of duplicated data to make them orderly and achieve a reduced amount, The role of improving quality.

All in all, accounts are a means to classify, record, organize, and aggregate raw data and other accounting information.