what is contra entry

A contra entry is a type of accounting entry where the debit and credit affect the same parent account, resulting in a net zero effect on the account. It is typically recorded when there is a transfer of funds between cash and bank accounts, and it does not impact the financial position of a business. Contra entries are commonly found in the cash book, where they are recorded in both the cash and bank columns. For example, when cash is withdrawn from a bank account, the cash account is debited, and the bank account is credited, resulting in a contra entry. Similarly, when cash is deposited into a bank account, the cash account is credited, and the bank account is debited, creating another contra entry