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.
For example, a retailer might receive $5,000 on Saturday (June 29) and $3,000 on Sunday (June 30). The money is deposited each evening in the bank's night depository. The store's Cash should be debited on each of those days for the respective amounts. However, the bank statement will report the $8,000 as a deposit on Monday, July 1, when the bank processes the items from the night depository.
When reconciling the bank statement dated June 30, the store will have to increase the balance on the bank statement by $8,000 for the deposits in transit. (Recall that the $8,000 is rightfully reported on the company's books as of June 30, but the $8,000 is not recorded on the bank statement as of June 30.)