Average Collected Balance

DEFINITION of 'Average Collected Balance'

The average balance of collected funds (less any uncleared or uncollected deposits) in a bank account over a specified period, usually one month. The average collected balance is calculated by adding the daily collected balance and dividing by the number of days in the period.

BREAKING DOWN 'Average Collected Balance'

The average collected balance is used to determine the amount of interest to be paid on a monthly balance, since uncollected funds do not earn interest. For most individuals, the difference between the average daily balance and average collected balance will be small, but for businesses it may be very large.

RELATED TERMS
  1. Average Daily Balance Method

    A credit card accounting method where interest charges are based ...
  2. Uncollected Funds

    The amount of a bank deposit that comes from checks that have ...
  3. Accounts Uncollectible

    Loans, receivables or other debts that have virtually no chance ...
  4. Collection Agency

    A company hired by lenders to recover funds that are past due ...
  5. Bad Debt Expense

    An entry found on a business's income statement that represents ...
  6. Average Outstanding Balance

    The unpaid, interest-bearing balance of a loan or loan portfolio ...
Related Articles
  1. Investing

    What's an Average Collection Period?

    Average collection period is an accounting term referring to the average number of days between a sale made on credit, and receipt of the payment. Businesses monitor this number to make sure ...
  2. Personal Finance

    The Advantages of Investing in Art & Collectibles

    Investing in collectibles can be profitable and fun, and can offer tax benefits for some.
  3. Financial Advisor

    How Are Collectibles Taxed?

    If you plan to sell collectibles, it's imperative that you know the tax implications.
  4. Retirement

    Contemplating Collectible Investments

    Profit margins are slim, but that needn't deter those with a passion for eras past.
  5. Personal Finance

    What is an Account Balance?

    An account balance represents the total amount of money in a financial account at any given moment.
  6. Investing

    What's an Allowance for Doubtful Accounts?

    The allowance for doubtful accounts represents the percentage of the accounts receivable the company expects to write-off as uncollectible.
  7. Investing

    5 Unethical Collection Scams That Consumers Should Be Aware Of

    Here are a few of the ways that scam artists prey on those in debt.
  8. Markets

    What's the Balance of Trade?

    The balance of trade is the difference between the value of all the goods and services a country exports and the goods and services it imports.
  9. Personal Finance

    New Credit Scoring Forgives Small Debt

    FICO 08 means that certain types of old debt won't affect your credit score, but it's not all good news.
  10. Investing

    What's a Trial Balance?

    A trial balance is a worksheet listing the debit or credit balances of all the ledger accounts for an entity. Under accounting theory, the total of all the debits must equal the total of all ...
RELATED FAQS
  1. How is cash flow affected by Average Collection Period?

    See how reducing a company's average collection period can help cash flow, and learn why collections practices are so important ... Read Answer >>
  2. In which industries is Average Collection Period most important?

    Find out which industries are most concerned with average collection period, and how different types of companies interact ... Read Answer >>
  3. Which is more important to a nation's economy, the balance of trade or the balance ...

    Learn how to differentiate between the balance of trade and balance of payments for international trade and why the balance ... Read Answer >>
  4. What is the formula for calculating the receivables turnover ratio?

    Find out how to calculate the accounts receivable turnover ratio for a business, which should highlight how efficiently the ... Read Answer >>
  5. Does the balance sheet always balance?

    Yes, a balance sheet should always balance. The name "balance sheet" is based on the fact that assets will equal liabilities ... Read Answer >>
  6. When is a balance transfer a good idea for paying off debt?

    Learn the best situation in which to do a balance transfer, enabling you to pay off your credit card debt more quickly while ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center