THREE COLUMN CASHBOOK.
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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
