What is an Adjunct Account?

An adjunct account refers to an account that leads to increase in the book value of a liability account. It is typically used to adjust the value of the liability account with a credit to match the total value of debits to asset accounts in a transaction. 

Because it increases the liability account, it cannot be a contra account – which reduces liabilities. As such, it is referred to as an adjunct account. 

Example of Using an Adjunct Account

A company issues a 12-month note payable at $100 face value with lump-sum interest rate of 10% due at maturity. The company receives $110 in cash for the note. The company would debit cash for $110, credit notes payable for $100, and $10 (10% of $100) in an adjunct Account.