Definitions for "Contra Account"
In the case of account debtors owing money to the company in the form of an account receivable. It means that this customer is also a supplier and sells to the company as a vendor resulting in an account payable to the same entity. This situation results in a contra account that has offsetting possibilities. Therefore, most lenders do not like to lend on account receivables that fall into this category.
An account whose balance is subtracted from an associated account in the financial statement.
An account that partially or wholly offsets a related opposite account.