Learn what a contra liability account is, how it functions in financial accounting, and explore examples of this essential component in balancing liabilities.

In a company's financial records, contra-revenues and expenses produce the same ultimate result: They both reduce net income. The difference is that expenses represent money that flows out of a ...

Contra accounts adjust asset values, like equipment depreciation reducing fixed assets. Increased allowance for doubtful accounts may signal rising uncollectable receivables. Companies use contra ...