The undeposited funds account is a temporary account for funds in your possession or waiting in the cash register to be deposited. Company owners that wait, say a week to go to the bank, will hold the money in a safe until taken to bank. So not to lose control and be able to close daily sales, the amount is sent to the current asset “undeposited fund” account. This amount will show in the balance sheet as part of the assets of the company. So to begin with you properly created the transit account like you mention. There is one step pending. Once the money and checks are sent to the bank, there has to be a transfer made from “undeposited funds” to the “bank” account. So the steps are as follows #1 create the transit account, #2 transfer funds when deposit to bank account is done So step #1 as follows: #1 How to create a new Undeposited Funds account Go gear (top right) / Cart of accounts / new Or Left down to Accounting / Chart of accounts / New Account Type: Current assets Detail Type: Undeposited Funds Name: Description of your choice Save Step #2 the transfer #2 Go to Gear (top right) / Transfer Transfer Funds From: Undeposited funds account Transfer Funds To: Checking account Transfer Amount: Amount to transfer Date: Date of Transfer Save ... View more