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Home Cash Book Treble/Three Column Cash Book
 
 

Treble/Three Column Cash Book:

Definition and Explanation:

We know, when cash is received from the debtors, discount may be allowed to them. And when cash is paid to creditors, discount may be received from them. It means the cash and the discount are very much related to each other. Another interesting thing is that when the cash is received, the discount is allowed and both cash account and discount account are debited. On the other hand, when the cash is paid, the discount is received and both the cash account and the discount account are credited in the books of account. Thus in "Double Column Cash Book another 'amount' column is provided on each side to record discount allowed and discount received". It means the Cash Book now will have three "Amount Columns on each side, i.e. Cash Column, Bank Column and Discount Allowed Column on the debit side and Cash Column, Bank Column and Discount Received Column on the credit side.

It may also be noted that when 'Discount' Column is added with both sides of Double Column Cash Book it becomes a "Treble or Three Column Cash Book".

It must be remembered that the Discount Column in Treble Column Cash Book is not an account. Both the Discount Allowed Account and Discount Received Account are opened in the ordinary Ledger. These columns are memorandum columns only; they help us remember how much discount has been allowed or received. The totals of discount allowed and discount received columns from two sides of Cash Book are posted in Discount Allowed A/c and Discount Received A/c respectively in the Ledger.

Example:

From the following particulars write up a Three Column Cash Book of Mr. Naseem.

2005   $
May 1: Cash in hand 40,000
May 1: Cash at Bank 30,000
May 3: Goods sold for cash 9,000
May 5: Goods bought for cash 18,000
May 8: Received a cheque from M. Farooq for $19,300 in full settlement of his dues $19,600 and deposited into the bank.  
May 11: Paid to Zulfiqar Cash $10,000 and a cheque for $9,400 in full settlement of his dues $20,000  
May 15: Cash received from M. Kaleem $9,800 in full settlement of his dues $10,000  
May 17: Paid cash to Adnan $3,900 in full clearance of his dues $4,000  
May 20: Received a cheque from Asim Tufail $7,800 in full settlement of his dues $8,000  
May 23: Asim Tufail's cheque endorsed to a creditor Akif in settlement of
$8,100
 
May 25: Bank credited interest 1,000 1,000
May 31: Bank debited bank charges . 1,400 1,400

Solution:

Three Column Cash Book

Date Particulars V/N L/F Discount
Allowed $
Cash
$
Bank
$
Date Particulars V/N L/F Discount
Received
$
Cash
$
Bank
$
1.5.05 Balanced b/d       40,000 30,000 5.5.05 Purchase A/c       18,000  
3.5.05 Sales A/c       9,000   11.5.05 Zulfqar A/c     600 10,000 9,400
8.5.05 M.Farooq A/c     300   19,300 17.5.05 Adnan A/     100 3,900  
15.5.05 M Kaleem A/c     200 9,800   23.5.05 Akif A/c     300 7,800  
20.5.05 Asim Tufail  A/c     200 7,800   31.5.05 Bank charges A/c         1,400
25.5.05 Interest A/c         1,000 31.5.05 Balance c/d       26,900 39,500
       


       


        700 66,600 50,300         1,000 66,600 50,300
       


       


Note: The Discount columns are not balanced. The two Discount columns are simply totaled and posted to Discount Allowed A/c and Discount Received A/c in the Ledger.

Discount Allowed A/C

31.5.2005

Sundry Discount A/C
as per cash book
700

 

   

Discount Received A/C

 

   

31.5.2005

Sundry Discount A/C
as per cash book
1,000

Relevant Articles:

Definition and Explanation of Cash Book
Simple or Single Column Cash Book
Two/Double Column Cash Book
Treble/Three Column Cash Book
Petty Cash Book

 

 

 

 

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Financial Accounting Topics


  Introduction to Accounting
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  Transactions and Accounting Equation
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  Analysis of Business Transactions
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  Journal, Ledger and Trial Balance
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  Accounting for Bills of Exchange
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  Special Journals
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  Cash Book
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Bank Reconciliation Statement
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  Final Accounts
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  Work Sheet
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  Capital and Revenue Items
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  Valuation of Inventories
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  Accounts of Non-profit Making Organizations
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  Statement of Cash Flows
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  Accounting Ratios Analysis
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  Depreciation, Provisions and Reserves
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  Accounting Dictionary
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  Financial Calculators
 
 
 
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  Cost Volume Profit Relationship
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  Variable Costing System
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  Activity Based Costing System
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  Standard Costing and Variance Analysis
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  Balanced Scorecard
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  Capital Investment Analysis/Capital Budgeting
 
 

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