Deposits in Transit
What is a Deposit in Transit?
A deposit in transit (or outstanding deposit) is a deposit that is shown in your records but does not appear on the bank’s month-end statement.
How it Works
If your business receives money, you record it in your records as a cash receipt.
When you deposit the money in the bank, the bank will record the deposit in your account
At the end of the month, the bank will prepare your bank statement.
This statement will include all your deposits for the month.
Sometimes, though, you will deposit money in the bank on the last day of the month.
At the same time, you will record the deposit as a cash receipt in your records.
However, the bank may have already sent your bank statement by the time you made the deposit.
Because of this, the deposit will not appear on the bank statement.
When this happens, the deposit is known as an outstanding deposit or a deposit in transit.
In other words, the deposit shown on your records is still on its way to the bank’s records.