Adjunct account definition
/What is an Adjunct Account?
An adjunct account increases the valuation of a liability account. In essence, the credit balance in this account is added to the liability account with which it is paired. An adjunct account may be considered a valuation account, since (on an aggregate basis) it alters the value of the account with which it is related. Adjunct accounts are rarely used in smaller businesses that deal with relatively simple business transactions.
Example of an Adjunct Account
The most common example of an adjunct account is the unamortized bond premium account, which is used when a business sells bonds at a premium. The unamortized bond premium and the bond liability, when combined, represent the actual liability of the bond issuer.
The Difference Between an Adjunct Account and a Contra Account
The adjunct account concept is the reverse of a contra account, which reduces the balance of the account with which it is paired. Thus, an adjunct account adds to the balance in an account, while a contra account reduces it.