What is the balance of contra-liabilities?

The balance of contra-liabilities is characterized by a debit balance. Contra-liabilities are accounts that reduce the total amount of liabilities reported on the balance sheet. These accounts are typically used to offset or decrease the value of specific liabilities.

For example, a common contra-liability account is "discount on bonds payable," which reflects the amount by which bonds are issued below their par value. The existence of such accounts implies that they hold a debit balance, indicating they reduce the overall liability figure.

This understanding contrasts with other options. A credit balance is typical for standard liability accounts, which increase with credits. The notion of "no balance" does not apply as contra-liabilities, by definition, do carry a balance that directly impacts the reported liability levels. Likewise, "equity balance" pertains to the owners' equity section and is not relevant to a discussion centered around liabilities. Thus, the debit balance in contra-liabilities uniquely signifies their role in presenting a more accurate picture of a company’s financial obligations.