What is a Deposit in Transit?
A deposit in transit refers to a payment that has been recorded in a company’s accounting books but hasn’t yet cleared the bank. This usually happens when a business deposits cash or checks near the end of a financial period, and the bank processes them later. These deposits appear as reconciling items in a bank reconciliation until they officially show up in the bank statement.
Think of it like ordering something from Amazon. The money is deducted from your account, but the package arrives later.
