Question

The usual balance in a Contra-Expense account is a:
A) DR
B) CR
C) It depends

Answer 1

The usual balance in a Contra-Expense account is a credit (CR). A contra-account reduces the value of a related account on a financial statement.

Step-by-step explanation:

The usual balance in a Contra-Expense account is a credit (CR).

A contra-account is an account that reduces the value of a related account on a financial statement. In the case of a Contra-Expense account, it is used to reduce or negate the amount recorded in the corresponding expense account. Since expenses are normally recorded as debits, a contra-expense account will have a credit balance to offset the debits recorded.

For example, if a company has an Expense account for $1,000 and a Contra-Expense account for $500, the net expense would be $500 ($1,000 - $500).