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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STANDARD RATE AND DATA SERVICE (SRDS), in advertising, is a company that produces a directory for each different type of media; normally listing: rates, circulation, contacts, markets serviced, etc.

SEPARATE DETERMINATION CONCEPT holds that each component of any category of assets or liabilities should be valued separately when arriving at a total to be shown in the accounts for that category. For example, the value of each stock item should be calculated individually (at the lower of cost and net realizable value) and these values should then be totaled to give the stock figure which will appear in the accounts. Stock should not be valued at the lower of total cost and total NRV.

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