What effect does a contra asset account have on a balance sheet?

1.  A contra asset is not an accounting term
2.  A contra asset has a credit balance and therefore a negative effect on total assets
3.  A contra asset with a positive balance will increase overall liabilities
4.  A contra asset has a debit balance and therefore a positive effect on total assets

Correct Answer:

•  A contra asset has a credit balance and therefore a negative effect on total assets