Which of the following accounting practices is recommended when dealing with unidentified deposits?

Investigating the source of unidentified deposits before recording them is crucial for maintaining accuracy and integrity in financial reporting. This practice ensures that the organization properly identifies where the money is coming from and can correctly allocate it in the accounting system. By understanding the origin of the deposit, the finance officer can determine whether it should be applied to an outstanding invoice, a customer prepayment, or another category, thus ensuring that financial records reflect the true operational status of the organization.

When deposits are unidentified, immediately recognizing them as revenue or refunding them could lead to errors in financial statements and could violate policies related to revenue recognition or customer refunds. Ignoring the deposit entirely would leave a gap in records, potentially causing reconciliation issues down the line. Therefore, careful investigation is essential for proper accounting practices.