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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INCORPORATED is a legal entity that has undergone incorporation through approval by a state government.

VERIFIABILITY is where the fact is capable of being tested (verified or falsified) by experiment or observation.

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