CONTRA ACCOUNT Definition

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CONTRA ACCOUNT is a. the reduction to the gross cost of an asset to arrive at the net cost; also known as a valuation allowance; e.g., accumulated depreciation is a contra account to the original cost of a fixed asset to arrive at the book value; or, b. reduction of a liability to arrive at its carrying value; e.g., bond discount, which is a reduction of bonds payable.

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INTERNAL CONTROL SYSTEM is a formalized system intended to provide reasonable assurance that the objectives of a program as a whole are met, e.g. financial control, quality control or process control.

AMT BOND is a municipal bond issue used to fund qualified private activity projects such as pollution control facilities or student loans. AMT bonds are taxed as public-purpose municipals, except when an entity pays the alternative minimum tax, in which case the bond is taxed at the full AMT rate.

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