Notes to Financial Statements
March 31, 1996
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
Alex. Brown Cash Reserve Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company. The Fund is organized as a Maryland
corporation consisting of three different portfolios, the Prime Series, the Treasury Series, and the Tax-Free
Series. The Prime Series consists of five different classes of shares: Alex. Brown Cash Reserve Prime Shares
("Prime Shares"), Flag Investors Cash Reserve Prime Shares Class A ("Flag Investors Class A Shares"), Flag
Investors Cash Reserve Prime Shares Class B ("Flag Investors Class B Shares"), Quality Cash Reserve Prime
Shares ("Quality Cash Shares") and Institutional Prime Shares. The Treasury Series offers two classes of shares:
Alex. Brown Cash Reserve Treasury Shares ("Treasury Shares") and Institutional Treasury Shares. The Tax-
Free Series offers only one class of shares. Matters affecting each class are voted on exclusively by such
shareholders.
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates. The following is a summary
of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. Security Valuation -- The Fund maintains a dollar-weighted average maturity of 90 days or less for each
portfolio. The securities of each portfolio are valued on the basis of amortized cost, which approximates market
value. This method values a security at its cost on the date of purchase, and thereafter, assumes a constant
amortization to maturity of any original issue or other discount or