Contra
Contra entry refers to transactions involving cash and bank accounts. In other words, any entry which affects both cash and bank accounts is called a contra entry.
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1. When do we create contra Vouchers? |
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Ans: While there is cash collected from the different income sources like monthly fees, hostel, etc. in the organization and collected cash is deposited to the bank accounts of the organization then contra vouchers are created also while cash is withdrawn for the petty cash or other office use then again contra vouchers are created. |
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2. Organization's bank account is not shown while creating contra vouchers, why? |
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Ans: It is because the organization's bank account is not created or if created then its parent account is in liabilities. |
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