Contra Enries

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I am have just completed my unit 3 simulation last night at college, we had to add a suspense amount to make the everything balance on the trial balance.

We then had three adjustments to make one was about a contra entry, I don't know what a contra entry is? We haven't learnt about those at college. Can anyone help? :roll:

Thanks.

Hayley

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Contra Enries

    Hi Hayley.

    If you have two departments in the same firm owing each other money - you wouldn't physically transfer the money each way - you would just do a 'contra entry'.

    Similarly, if you owed another firm money, and they also owed you money, you could do the same.

    Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Contra Entries

    Hi Scott,

    Thanks for your help. I thought it was going to something really difficult.

    Hayley
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Contra Enries

    'Contra' literally means against or opposite. So for example, if you were to make a part payment to a supplier, then that would be considered a contra entry, as although it doesnt clear the outstanding balance, it goes in the accounts against the balance on the supplier account
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Contra Enries

    Hi

    Please do not forget that this has to be made once agreement with the other party has been obtained - otherwise you can get into an awful mess!

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