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.
![dit1](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit1.jpg)
How it Works
If your business receives money, you record it in your records as a cash receipt.
![dit2](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit2.jpg)
When you deposit the money in the bank, the bank will record the deposit in your account
![dit3](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit3.jpg)
At the end of the month, the bank will prepare your bank statement.
![dit4.1](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit4.1.jpg)
This statement will include all your deposits for the month.
![dit5.1](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit5.1.jpg)
Sometimes, though, you will deposit money in the bank on the last day of the month.
![dit6](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit6.jpg)
At the same time, you will record the deposit as a cash receipt in your records.
![dit7.1](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit7.1.jpg)
However, the bank may have already sent your bank statement by the time you made the deposit.
![dit8](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit8.jpg)
Because of this, the deposit will not appear on the bank statement.
![dit9](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit9.jpg)
When this happens, the deposit is known as an outstanding deposit or a deposit in transit.
![dit10](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit10.jpg)
In other words, the deposit shown on your records is still on its way to the bank’s records.
![dit11](https://seeaccountingnow.online/wp-content/uploads/2020/11/dit11.jpg)