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A contra account is best defined as an account whose normal balance is:
Aonly ever recorded in the journal, never the ledger
Balways zero at the end of the period
Cthe same as the account it offsets
Dthe opposite of its account classification's normal balance
Answer & Solution
Correct answer: D. the opposite of its account classification's normal balance
1. A contra account is a hybrid type that offsets another account.
2. Its normal balance is intentionally the opposite of the normal balance for that classification.
3. For example, a contra asset has a credit balance instead of the usual debit balance.
4. It is not always zero (B), not the same side as what it offsets (C), and it is posted to ledgers like other accounts (D).
5. Therefore its normal balance is the opposite of its classification's.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §1.6 "Account Wrap-Up", p.40_