DEFINITION of Adjunct Account

An adjunct account is an account in financial reporting that increases the book value of a liability account. An adjunct account is a valuation account from which credit balances are added to another account. The concept of adjunct account can be contrasted with the concept of a contra account, which decreases the amount of a liability account through a debit entry.

BREAKING DOWN Adjunct Account

An adjunct account consists of entries that increase the book value of a liability account. This is in contrast to a contra account, as a discount on bonds payable account would result in a debit to a liability account.

Example of an Adjunct Account

For example, if a company issues bonds, the unamortized premium on bonds payable account (sometimes called bond premium) is an adjunct account because its credit balance is added to the bonds payable account.