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 |
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