In transit definition
/What is In Transit?
In transit refers to tangible goods or paperwork that are en route from one location to another. In accounting, the "in transit" term is most commonly applied to deposits that are in transit from a company to its bank, resulting in a reconciling item on the company's bank reconciliation if the checks are in transit at the end of a month.
Example of In Transit
For example, on July 31, Smith Corporation receives a check from a customer in the amount of $1,000. It records the check as a cash receipt on the same day, and deposits the check at its bank at the end of the day. The bank does not record the check in its books until the following day, August 1. Thus, when Smith's controller completes the month-end bank reconciliation, she should add $1,000 to the cash balance shown on the bank statement in order to have it match the cash balance shown in Smith's accounting records.
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Usage in Transport Services
In transport services, the "in transit" term refers to goods that have left the location at which they were loaded onto a mode of transport, and have not yet reached the location at which they will be offloaded. The goods are still considered to be in transit at any waypoints at which the goods might be shifted onto a different mode of transport.
For example, Smith Corporation loads a pallet of computer parts onto a truck, bound for a customer located in Memphis. Until such time as the goods are delivered to the customer, they are considered to be in transit.
Terms Similar to In Transit
In transit is also known as en route.