Accounting for Year-End Gifts

This opens up another consideration. Where should this money reside on the balance sheet to facilitate reconciliation? Since it did not make it to the bank account by Dec. 31, it shouldn't be in the cash account you use for your bank. But you do want it in the "cash and cash equivalents" section of the balance sheet. It's not a receivable, so don't book it that way. I recommend using a "deposit in transit" account that is similar to cash but does not represent an actual bank account. Then, when you make the deposit, create an entry to debit cash (i.e., your bank account) and credit the deposit in transit account.