Normally, Undeposited Funds is a default account automatically created when creating the company chart of accounts in QBO. Check your Chart of Accounts (Dashboard > Accounting > Chart of Accounts > Undeposited Funds). It should be under “Other Current Assets” Type column. You can also filter by name, just type “undeposited funds” in the search field. See screenshot below.
If it’s not on the active list, first check “inactive” list. (small “Gear” at the right side > “Include inactive” under Other).
If it’s not listed (active or inactive) in the Chart of Accounts, then create a new one. This is a specific default account in QBO so follow the steps below:
1) From the Chart of Accounts page ((Dashboard > Accounting > Chart of Accounts), click New green button at top right corner.
2) Account Type = Other Current Assets; Detail Type = Undeposited Funds (should be at the bottom); Name = Undeposited Funds.
3) SAVE AND CLOSE.
4) See screenshot below for reference.