If you have a backdated transaction, do you include that transaction in the "new" end of day balance when calculating Average Daily Balance? For example, the EOD balance on Monday is $500. On Wednesday you back date a transaction of -$1,000 to the account as of Monday. Technically, the new EOD balance for Monday is now -$500.00, but that is not reflected anywhere except in the software. Should the ADB include the $500 EOD balance or the corrected -$500?

Well in your example it is not that important which way you go, but if you made a mistake and did not process a deposit correctly and had to back date it to Monday, not paying interest on that from Monday is going to put you in a very bad position.

thanks, but would you use the corrected EOD balance?

Use it for what? To calculate accrued interest? How could you not?

For calculating Average Daily Balance.

You mean for calculating the APY? What are you using the ADB for? If this is a non-interest-bearing account, what does that ADB have to do with anything? You need to put this in context, otherwise we are all guess where you are going with this question. If you do not retroactively adjust the end of day balance, how can you calculate accrued interest and the APY for the period in question correctly?