An absorption account is an account used in cost accounting to record overhead costs that are allocated (absorbed) into production.

It helps to:

Collect indirect expenses (like factory rent, electricity, supervision)

Transfer those costs to products or jobs using a fixed rate

If the absorbed amount:

Is more than actual overhead, it is called over-absorption

Is less than actual overhead, it is called under-absorption

In simple terms, an absorption account is used to track and adjust factory overhead costs allocated to products.