What is Outstanding deposit

Outstanding deposit

1.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. An outstanding deposit is also known as a deposit in transit.


2.The amount of cash received by a company that is recorded on the company's general ledger even though the deposit may not yet appear as a credit in the company's bank account. Outstanding deposits are considered receivables on a company's balance sheet.

3.An outstanding deposit is that amount of cash recorded by the receiving entity, but which has not yet been recorded by its bank. 

4.All outstanding deposits are listed as reconciling items on the periodic bank reconciliation prepared by the receiving entity. These deposits are subtracted from the book balance of the receiving entity to arrive at the bank balance.

For example, 
a company receives $1,000 on March 31, a Friday, and records it as having been received in March. The bank will record the receipt in the company's account the following Monday, April 3. The $1,000 is considered by the company to be an outstanding deposit until it is recorded by the bank on April 3.

SIMILARITY =outstanding deposit/ deposit in transits/outstanding lodgment.

To illustrate an outstanding deposit,

 let's assume that on October 31 a company received cash and checks from customers in the amount of $800. Clearly the company should report the $800 as part of its cash as of October 31. However, the company did not deposit the $800 into its bank account until after October 31. Since the $800 is not on its bank statement as of October 31, the $800 is described as an outstanding deposit or deposit in transit as of October 31.