COST BASIS Definition

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COST BASIS, in securities, is the purchase price after commissions or other expenses. It is used to calculate capital gains or losses when the security is eventually sold.

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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.

SS see SAFETY STOCK.

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