How will a contra entry appear?

A contra entry occurs when transactions between two accounts offset each other. In the context of this question, when a contra entry is made, it reflects amounts that are owed to each other. For instance, if a business borrows money from a supplier, the amount owed can be recorded as a debit in the purchase ledger (indicating an increase in expenses) and simultaneously recorded as a credit in the sales ledger (reflecting that the amount will reduce the revenue that the business receives or owed).

This dual effect illustrates that the business has both an expense to record in its purchases and a corresponding reduction in the amount it will receive in sales. Such entries are internal transactions that balance the books, making sure that both ledgers reflect the accurate financial state concerning the transaction.

The other options do not correctly represent the nature of a contra entry. They fail to show the dual impact on both ledgers or misplace the entry in financial statements where it wouldn't naturally occur, thus clarifying the importance of option B in correctly depicting the relationship between these accounts.