Poetry in double entry

By | March 24, 2018

An Ode to Contra Accounts – A thing of beauty and magic

Oh, Mighty Contra Account

What curious creature are you ?

You sit with the account that you modify apparently mocking the rules of normal balance

You have asset in your name, but your normal balance is credit

You say you are a Liability, but you have a debit normal balance

You claim to be shareholders’ equity but you have a debit normal balance

What kind of magic do you conceal and reveal?

 

Oh, Mighty contra account

You provide modification and insight

We know more about the subject when you exist

You modify the account to reveal more information.

You make gross and net live in harmony

 

Oh, Mighty contra account – long may you thrive

Long Live Accumulated Depreciation revealing gross and net long-term assets

Viva Allowance for Bad Debts keeping only net receivables in the balance sheet

Hurrah for   treasury Stock making sure that buy backs and issued stock do not get contaminated

Three cheers for sales allowances that reveal net revenue without concealing the gross

Glory to Bond Payable discount bringing insight to  Bond Pricing