What is an outstanding deposit?

Definition of Outstanding Deposit

An outstanding deposit refers to a company's receipts (cash, checks from customers, etc.) which have been recorded in the company's general ledger accounts, but the amount does not yet appear on the bank statement. An outstanding deposit is also known as a deposit in transit.

Example of Outstanding Deposit

Assume that on October 31, a company received cash and checks from customers in the amount of $800. This $800 should be reported as part of the company's cash balance as of October 31. However, the company did not deposit the $800 in its bank account until the morning of November 1. Since the $800 is not on the company's bank statement as of October 31, the $800 is an outstanding deposit or deposit in transit as of October 31.

On the company's October 31 bank reconciliation, the outstanding deposit is shown as an addition to the balance on the October 31 bank statement. (There is no adjustment to the company's accounts since the $800 had been recorded as of October 31.)

To guide you in preparing the bank reconciliation we developed a bank reconciliation template/form which is part of AccountingCoach PRO. You can also read our free Explanation of the Bank Reconciliation.