Contra Asset Account

[Community]

Hi,

How would I create a contra asset account in Gnucash (2.6.4)?

This would be an asset account where all the accumulated depreciations will get records instead of crediting these directly to the corresponding asset accounts.

Major difference between a contra asset account and a regular one is that the former is having a credit balance, whereas the latter one is having a debit balance.

Would this be accomplished by assigning account type "liability" to the contra asset account?


Example journal entries:

(01) Dr. Buy equipment			(A) current assets		100,000.00
	Cr. Pay equipment		(A) cash			100,000.00

(02) Dr. Equipment Depreciation		(E) depreciation expenses	 10,000.00
	Cr. Depreciate equipement       (XA) accumulated depreciations	 10,000.00

On the balance sheet the accumulated depreciations would then get subtracted from the assets.

- Martin