do contra accounts have debit or credit balances 
contra assets have natural credit balances whereas assets normally have positive debit balances contra assets though still reported along with other assets have an opposite type of natural balance contra liability equity and revenue accounts have natural debit balances these three types of contra accounts are used to reduce liabilities equity and revenue which all have natural credit balances therefore for these three the debit balance actually represents a negative amount the bottom linecontra accounts are used to reduce the original account directly keeping financial accounting records clean this allows for the easy determination of historical costs this is particularly important for contra asset accounts the difference between an asset s balance and the contra account asset balance is the book value 