When some money is deposited with any third person for some specific purpose that is called deposits in business terms. The security may be deposited for the following purposes in a business firm:-

1. Security deposits for electricity.

2  Security deposits for water

3. Security deposits for telephone.

4. Security deposits for sales tax.

5. Security deposits with suppliers.

6. Security deposits with customers.

7. Security deposits with any other person for any specific reason.

Deposits are matured when the particular task is finished for which the security is given. The deposits are assets of the firm and these are shown in assets side of the balance sheet.