Accounting Interview Question:

What is shadow balance?

Submitted by: Administrator

Shadow Balance in bank accounts is the balance unto which the subsequent debits can be posted.

Shadow Balance = Book Balance - Debit (yet to be authorized for posting).

Example: Book balance is 1000. There is a debit of 500. The debit is posted in the system and is sent for authorization. Now the Account shows a Shadow Balance of 500.
Submitted by: Administrator