ABSORBED ACCOUNT Meaning and
Definition
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An absorbed account refers to a financial account that has been integrated or combined into another account or entity. This typically occurs when multiple entities merge or when a larger entity acquires a smaller one. As a result, the absorbed account is no longer identifiable as a separate entity.
In such cases, the absorbed account's financial records, assets, liabilities, and transactions are incorporated into the primary or acquiring account/entity. This integration ensures that the absorbed account's financial information becomes a part of the overall financial statements and reports of the acquiring entity.
The purpose behind absorbing an account is to consolidate financial information, reduce redundancy, and streamline reporting processes. By eliminating separate accounts, businesses can avoid potential confusion or duplication of records and simplify their financial reporting. This enables a more comprehensive overview of the organization's financial position and performance.
When an account has been absorbed, any previous account numbers or identifiers associated with it are discontinued and replaced with the primary account's identifiers. This ensures that the absorbed account is no longer distinguishable from the primary account and its financial information becomes indistinguishable.
Etymology of ABSORBED ACCOUNT
The phrase "absorbed account" does not have a specific etymology as it is a combination of two individual words, "absorbed" and "account". However, we can look at the etymology of each word separately:
1. Absorbed: The word "absorbed" comes from the Latin word "absorbere", which means "to swallow up". It entered the English language in the 15th century with the meaning of "to take in, consume, or engross".
2. Account: The word "account" also originates from Latin, where "computare" means "to calculate". In Old French, it developed into the word "acompte", which referred to a bill or record of money owed. Over time, it evolved into the modern English term "account", which can mean a narrative or explanation of events, a financial record, or a description of someone's qualities or behavior.
