THREE COLUMN CASHBOOK
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live and learn. Let’s get straight to work.
Three Column Cashbook is a book that shows or combines Cash, Bank, and
Discount on the debit and credit sides. On the debit side of the cashbook is
the Discount Allowed column while Discount Received column is on the credit
side.
Discount is the reduction in the price of Goods in
order to encourage Bulk Purchases and Prompt Payment.
Types of Discount:
1. Trade Discount is an
Allowance made by Manufacturers or Wholesalers, to retailers in form of
Reduction from price of goods supplied.
2. Cash Discount is a percentage
allowance for prompt payment of an account or for payment within a specified
period of time.
Classification of Cash
Discount:
1. Discount Allowed is the
discount given to the customers for prompt payment of their account. It will be
entered on the debit side of the three column cashbook and be credited to the
personal account
of the customer.
2. Discount Received This is the
discount received from suppliers for prompt payment of their account. It is
credited to the discount received column on the three column cashbook and
debited to the personal account of the supplier.
EXAMPLE 1:
Write up a three column
cashbook from the following details of the year 2014.
May 1-Balance brought
forward, Cash in hand N 700, Cash at Bank N 15,000.
May 3- Received a cash loan
of N 700 from Precious.
May 5- Bought goods for
cash N 500.
May 6- Bought Motor van
paying by cheque N 200.
May 8- Cash withdrawn from
the bank N 350.
May 10- Paid wages in cash
N100.
May 12- Cash Drawings N150.
May 14- Cash Sales paid
directly to the bank N1,000.
May 16- We paid the following
accounts by cheque less 10% discount in each case- Frank N250, Julia N300,
Roland N370.
May 18- The following paid
us their accounts by cheque in each cash deducting 5 %
discount- Favour N250, Tamera N400.
May 20- Received a further
loan of N100 from Precious by cheque.
May 22- We paid Zoe his
account of N140 by cheque.
May 24- Cash Sales N250.
May 26- Paid rent in cash
N50.
May 28- Received commission
by cheque N180
May 30- The following
persons paid us their accounts by cheque in each case deducting 10% discount-
Allen N500, Sarah N120, Janet N440.
| Dr Three Column Cash Book. | |||||
| Date | Particulars | F | Cash | Bank | Discount Allowed |
| 1-May | Bal B/f | 700 | 15,000 | ||
| 3-May | Precious | 700 | |||
| 8-May | Bank | c | 350 | ||
| ###### | Sales | 1,000 | |||
| ###### | Favour | 237.5 | 12.5 | ||
| ###### | Tamera | 380 | 20 | ||
| ###### | Precious | 100 | |||
| ###### | Sales | 250 | |||
| ###### | Commission | 180 | |||
| ###### | Allen | 450 | 50 | ||
| ###### | Sarah | 108 | 12 | ||
| ###### | Janet | 396 | 44 | ||
| 3,000 | 16,852 | 138.5 | |||
| Bal b/f | 2,200 | 15,334 | |||
|
This brings
us to the end of today's session. Hope this was very helpful to you, leave a
comment of what you think of this tutorial and of your questions below. Have a
Blessed Day and Remember You are Amazing. God Bless.
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