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The beginning cash balance is taken for the cash account by first selecting the actuals up through (but not including) the reporting period.
- Interest Allocation Report - Starting Balance Amount
The activity for the cash account is then selected for the reporting period using the year, period, and the effective date.
- See the example below in additional information
The effective date is how we determine how to compute the average daily balance.

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For example:

Let's say Beginning Cash Balance for Cash Account A: $300
Cash Account A has 3 transactions in October
We divide the amount of each transaction by the number of days in the month and then multiply that number by the number of days left in the month based on the effective day (seen below)
- Transaction 1: $8000 – Effective date 10/1/12 - (8000/31) * 31 = $8000
- Transaction 2: $250 – Effective date 10/5/12 - (250/31) * 27 = $217.74
- Transaction 3: $5000 – Effective date 10/10/12 - (5000/31)*22 = $3548.38
  - The average daily balance will take that sum and then add in the beginning cash balance, so the average daily balance will be $12066.1

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