Deposit in Transit
Definition
A deposit in transit is money the business has recorded in the books but has not yet appeared on the bank statement. It is a legitimate timing difference in a bank reconciliation.
Example
The business deposits $500 on the last day of the month. The bank statement was cut the same day, so the $500 does not appear yet. It is a deposit in transit.
Why It Matters
Deposits in transit explain part of the difference between the bank balance and the book balance during reconciliation.