where two entities have both Receivable debtors and payable creditor's against each other then these are called as contra assets and liability e.g.A LTD is debtor of B LTD as well as a creditior if same co then both cos are liable to pay and receive from each other.so each entity Wil net off the balances payable and receivable against each other and post contra entries and then only pay net payable by either of the entity
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