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Back-Value Transactions

As noted earlier, when you post a back-value transaction, General Ledger adjusts the end-of-day and aggregate balances of the affected accounts, as of the effective date and all subsequent dates. The example below continues our general example (see: Average Balance Examples), and illustrates what happens when you post a back-value transaction.

Back-Value Transaction Example

In our earlier example, the end-of-day and aggregate balances were as follows:

Daily Account Balances
  Account A Account B Account C
  End-of-
day
Balance 		 
Aggregate
Balance 		End-of-
day
Balance 		 
Aggregate
Balance 		End-of-
day
Balance 		 
Aggregate
Balance
Day 1 1,000 1,000 (1,000) (1,000) 0 0
Day 2 1,100 2,100 (1,000) (2,000) (100) (100)
Day 3 1,100 3,200 (800) (2,800) (300) (400)

The average balance, as of Day 3, for each account is:

    Account A 3,200 / 3 = 1,066.66
    Account B (2,800) / 3 = (933.33)
    Account C (400) / 3 = (133.33)

Now assume that the following back-value transaction occurs on Day 3, with an effective date of Day 1:

Dr. Account A . . . . . . . . . 500

Cr. Account B . . . . . . . . . . 500

The transaction will have the following effects:

Daily Account Balances
  Account A Account B Account C
  End-of-
day
Balance 		 
Aggregate
Balance 		End-of-
day
Balance 		 
Aggregate
Balance 		End-of-
day
Balance 		 
Aggregate
Balance
Day 1 1,500 1,500 (1,500) (1,500) 0 0
Day 2 1,600 3,100 (1,500) (3,000) (100) (100)
Day 3 1,600 4,700 (1,300) (4,300) (300) (400)

The average balance, as of Day 3, for each account is now:

    Account A 4,700 / 3 = 1,566.66
    Account B (4,300) / 3 = (1,433.33)
    Account C (400) / 3 = (133.33)

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