Adjusted Balance Method

DEFINITION of 'Adjusted Balance Method'

A finance/accounting method where costs are based on the amount(s) owing at the end of the current time period (once credits and payments are posted).

BREAKING DOWN 'Adjusted Balance Method'

Most savings accounts use this system. Interest earned in the account is calculated at the end of the month once all the transactions have been posted.

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RELATED FAQS
  1. How is interest charged on most lines of credit?

    Learn how most financial institutions calculate interest on lines of credit by using the average daily balance method and ... Read Answer >>
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    Learn why the Internal Revenue Service cares about accounting practices, as these ensure the accurate reporting of financial ... Read Answer >>
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