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Let's take a look really quick at contra accounts. So far we haven't actually looked at contra accounts. We've just looked at, well, regular accounts. And of course, regular accounts is all the stuff that's like cash, accounts receivable, accounts payable, so on and so on. These are all the regular accounts. So what in the world is a contra account? Well, let's take a look at what the word contra actually means. Thanks to Google, we know that contra means against, opposite, or contrasting. We all basically understand that, but it literally means against or opposite. So a contra account can kind of be read as an opposite account.
Okay, so we've talked about normal balances. We've talked about how for cash, cash increases go over here, decreases go over here. We spent a ton of time going over that. These are all normal accounts. These are all just accounts. Now, what does a contra account do? Well, let's take cash and make it broader. Let's say we're dealing with assets.
Assets left, right. Liabilities. Liabilities are the opposite of assets, right? Increases on the right, decreases on the left. Now, what if we had something that we decided was a contra asset? What if we somehow figured out that an account was a contra asset? Well, we would swap them. So for a contra asset, it is the opposite of assets. So if you ever see anything that says it's a contra asset, and I'll tell you what those are in a second, a contra asset is simply the opposite of assets. And in the same way, a contra liability is the opposite of liabilities.
And so you may be tempted to think that a contra asset is a liability. That's not the case. A contra asset is not a liability, and a contra liability is not an asset. A contra asset is a contra asset. That's as far as it goes. And a contra liability is a contra liability. And you could even have a contra revenue. And so if we say revenue is like this, then a contra revenue is opposite. You picking up on a theme here? So what is a contra asset?
A contra asset would be something like accumulated depreciation. And I'll go over in more detail what accumulated depreciation is in another video. But just for now, know that accumulated depreciation is a contra asset. And so the only purpose, the only reason that accumulated depreciation exists is to take away from the value of assets. So accumulated depreciation decreases value of assets. So on a balance sheet, you'll see something like assets less accumulated depreciation. So if you've got $1,000 in assets and $60 in accumulated depreciation, then you have $940 of book value of assets. And I'm gonna stop here on the contra accounts because the only one that is coming up is this accumulated depreciation.
And we've got a whole video on depreciation. But before we talked about depreciation, I needed you to know what a contra account is. And there will be more. Like we'll go over contra revenues at a later time. But for now, just remember that a contra account is its own special type of account. And you don't have to memorize what side all of this stuff is on because you already know all the good stuff. If you know the normal, like if you know what assets is, you know how to deal with contra assets. You just swap them because contra literally means opposite.