When you run the useradd command, the user and group information stored in the password and group databases are updated for the newly created user account and, if specified, the home directory of the new user is created as well.
The most important options which apply to the useradd command [include]:
-d
Create a new user account with a custom home directory
-u
Create a new user account with a specific UID
{source: LPIC-1 (102) (Version 5.0), pages 169-170}
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