A deposit in transit is cash (currency, coins, checks, electronic transfers) that a company has received and is rightfully reported as Cash on its balance sheet, but does not appear on the bank statement until a later date.
In respect to this, do deposits in transit require an adjusting entry?
As of August 31 (the bank statement date) this is a deposit in transit. Because deposits in transit are already included in the company's Cash account, there is no need to adjust the company's records. However, deposits in transit are not yet on the bank statement.
What are outstanding deposits in a bank reconciliation?
An outstanding deposit refers to a company's receipts (cash, checks from customers, etc.) which have been recorded by the company, but the amount will appear on its bank statement at a later date. The $800 outstanding deposit is pertinent to the company's bank reconciliation as of October 31.
What is payment in transit?
A deposit in transit is cash and checks that have been received and recorded by an entity, but which have not yet been recorded in the records of the bank where the funds are deposited.
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