Absorbed Account

DEFINITION of 'Absorbed Account'

An account that has been combined or that has merged with another related account. Accounts are often absorbed into existing accounts as a way of simplifying the accounting process. Once an account has been absorbed the original account will cease to exist, although a paper trail will remain to show how funds have been moved.

BREAKING DOWN 'Absorbed Account'

Accounts are simply a way for a company or individual to separate finances into manageable categories, so it is not surprising that a separation or category that made sense at one time can become obsolete. When this happens, the obsolete account is absorbed into an area where it fits better. Rather than being a unique account, the absorbed account is combined with another existing account. When this is done at a business, the accountant or bookkeeper records and reconciles the changes.

RELATED TERMS
  1. Chart Of Accounts

    A listing of each account a company owns, along with the account ...
  2. Absorbed Cost

    The indirect costs that are associated with manufacturing. Absorbed ...
  3. Linked Savings Account

    Any type of bank savings account that is linked by account number ...
  4. Account History

    All activity within an account, usually since inception. In a ...
  5. Money Market Account

    An interest-bearing account that typically pays a higher interest ...
  6. Trading Account

    1. An account similar to a traditional bank account, holding ...
Related Articles
  1. Investing Basics

    What Is A Trading Account?

    A trading account enables an investor to buy and sell securities.
  2. Professionals

    Tax Accounting

    Tax Accounting
  3. Executive Compensation

    Accountant: Job Description & Average Salary

    Discover what the job description of an accountant entails, along with education and training, salary and skills necessary for success.
  4. Savings

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  5. Investing Basics

    A Day In The Life Of An Accountant

    An analysis of the accountant profession, who becomes an accountant, what they do, where they work, and salary ranges.
  6. Savings

    Understanding Savings Accounts

    A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.
  7. Economics

    Explaining Double Entry Accounting

    Double entry is an accounting and bookkeeping term describing the method of entering transactions into the accounting records.
  8. Professionals

    TYPES OF ACCOUNTS

    Individual Account An individual account is an account that is owned by one person. That person makes the determination as to what securities are purchased and sold. In addition, that person ...
  9. Options & Futures

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  10. Professionals

    Accounting Research Manager: Job Description & Average Salary

    Learn about the average salary of an accounting research manager as well as the necessary skills, experience and education, and licenses to hold this position.
RELATED FAQS
  1. What does it mean when the shares in my account have been liquidated?

    An account liquidation occurs when the holdings of an account are sold off by the firm in which the account was created. ... Read Answer >>
  2. What are the main objectives of cost accounting?

    Learn about the main benefits of cost accounting systems, why they are different from financial accounting and why they are ... Read Answer >>
  3. Why would you keep funds in a money market account and not a savings account?

    Read about the differences between money market accounts and savings accounts, and see why a depositor would elect a money ... Read Answer >>
  4. What is the difference between the current account and the capital account?

    Learn how to differentiate between the capital account and the current account, the two components of the balance of payments ... Read Answer >>
  5. Why is reconciliation important in accounting?

    Learn about accounting reconciliation and its importance for individuals and businesses to help prevent fraudulent activity ... Read Answer >>
  6. What are the main advantages and disadvantages to the cost accounting method?

    Read a brief overview of the main advantages and disadvantages of the cost accounting method as it relates to business analysis ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center