Three Column Cash Book | Concept & Format

The concept of three column cash book is not a very different from two column cash book. However, there is one very important feature that makes three column cash book more resourceful.

Three column cash book has two sides for recipts and payments made in the accounting period, but Three Column Cash Book has three columns on each side to record transaction figures. 

On receipts side there is a Cash collected or Cheques received columns, and an addition third column for Discount allowed or Sales discount to balance the transactions which carries Discounts allowed to the customers.

On payments side there is a Cash paid or Cheques issued columns, and an addition third column for Discount received or purchase discount to balance the transactions which carries Discounts received from the vendors. Sales Discount is an Expense in Nature, while Purchase Discount is Revenue.

Few examples are as under.

For sale discount:

Mr. Adeel paid 9,000 in full settlement of his outstanding balance of 10,000.

Journal entry:

Cash Book entry:

For purchase discount:

We paid Mr. Salman 9,000 in full settlement of his debt 10,000.

Journal entry:

Cash Book entry:




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