Multiple choice

Which of the following correctly explains about adjunct account?

  1. It increases book value of liability account.

  2. It increases book value of asset account.

  3. It increases book value of expense account.

  4. It increases book value of income account.

  5. It decreases book value of liability account.
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A Correct answer
Explanation

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. 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.

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