Dear Friends,
Shall we pass JV instead of Contra?
Is this related to Tally? If so, contra entries are used only for banking transactions.
If your using journal voucher entries in normal accounting terms, it is fine because all entries are usually journal entries. Once in a while, you have to reduce the value of something like for example, bad debts allowance created from receivables. You credit receivables and create bad debts allowance by debiting it in the asset side, another example is, purchase returns. Usually these entries are related a particular account, There is no hard core rule that only bank and cash accounts can be used for contra entries.
CAclubindia
