What is contra entry?

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Contra entries are those entries in which same account can be debited and credited in contrary situation.For example we debit Bank account when depositing cash.At the same time we credit bank account when withdrawing money from bank. In manual accounting Contra entry is recorded in the journal by marking (C) in the Particulars column after ledger name. or in other words contra entry is Bookkeeping entry that is entered on the opposite side of an earlier entry to cancel its effect on the account balance.
Situation : Deposit money into bank 5000

contra entry

  • Debit: Bank Account : 5000.00
  • Credit: Cash               : 5000.00

Contrary Situation: Withdraw money from bank

  • Debit:Cash                 : 5000.00
  • Credit: Bank Account: 5000.00

Contra entry has no ultimate affect in the business. When a contra entry is made, the affect is transferred from one account to another.But no result is created in the business. For example when cash is deposited to bank, It is just moving of fund (current asset) from cash  account to bank account. Hence in the balance sheet, amount is floated from one item to another on the same side.

Examples of contra entry transactions?

In the following situations we use contra entries.

  • When cash is deposited to bank.
  • When cash is withdrawn from bank.
  • When fund is transferred from one bank to another
  • When cash is transferred to one cash account to another.


  1. Fund transferred from BANK X to BANK Y

Debit: Bank Y

Credit: Bank X

  1. Fund transferred from BANK Y to BANK X

Debit: Bank X

Credit: Bank Y

  1. Fund transferred from BANK Y to Cash account. or withdrawal of cash.

Debit: Cash A/c

Credit: Bank Y

  1. Fund transferred from Cash a/c  to Bank Y. or Cash deposit in to bank account.

Debit:Bank Y

Credit: Cash

  • When cash is transferred from one cash-in-hand account to another. for example  cash account to petty cash account.

Debit:Petty cash

Credit: Cash

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