What is an Outstanding Deposit?

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

Deposits are typically only outstanding for one business day, so there tend to be few of these deposits listed as reconciling items whenever a bank reconciliation is prepared.

Example of an Outstanding Deposit

As an example of an outstanding deposit, Refill Corporation received a $2,000 check from a customer on August 31. The bookkeeper recorded this check on August 31, but deposited it at the bank extremely late in the day, so that the bank did not record it until September 1. In this situation, Refill should record the cash in its accounting system as of August 31, and list it on the month-end bank reconciliation as a deposit in transit.