Contra Entries

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. 

Hi, nothing to worry about. I just checked out this software details, and it has functionality similar to other ERP’s. So, finally only tally has the facility to work on journal voucher or transaction entry modes. Although I’m just an enthusiast, I have a hunch that you will be working on ledger accounting as per the records created in Epicor. That means recording transactions in separate books for everything and of course it will be in journal voucher mode where there will be lines and one has to fill out the details like debit or credit amounts. Contra entries will be necessary when you are nullifying a transaction.