What is ‘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.
Explaining ‘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.
Further Reading
- An absorption approach to modeling the US current account – onlinelibrary.wiley.com [PDF]
- The US current account deficit and economic development: collateral for a total return swap – www.nber.org [PDF]
- EU funds absorption rate and the economic growth – halshs.archives-ouvertes.fr [PDF]
- Aid absorption and spending in Africa: A panel cointegration approach – www.tandfonline.com [PDF]
- The absorption of financial services in an Islamic environment – www.sciencedirect.com [PDF]
- How politics matters for EU funds' absorption problems–a fuzzy-set analysis – www.tandfonline.com [PDF]
