When you open an Account, you are presented with a set of fields for storing address. If you check the CRM account entity details, you will find there are actually two sets of address fields available. By default only address_1 set of fields are placed on the form, but you can also add the second set of address_2 fields.
Besides this we are also provided with the option to add multiple other addresses under the More Addresses section on the account form.
Common perception of this design would be that 2 default set of address fields have been added on the account entity for ease of access and use. They have the Customer Address entity to store the more addresses associated with the Account.
We just happened to find out that this is not really the case. All addresses are only stored in the Customer Address entity.
When you create a new account/contact, it would by default in the background add 2 entries in the Customer Address entity for the 2 set of address fields available on the Account form. CRM distinguishes these entries from the rest of the entries to be displayed in More addresses using the Address number column. Address number 1 and 2 are reserved for the 2 set of address fields available on the account form.
Hope this would help someone out there understand the technical concept of addresses much better from now on