Triple three column cash book Accounting for Management: Fill out & sign online

All items on the credit side of the cash book are posted to the debit of respective accounts in the ledger. Triple column cash books have three columns on both the debit and credit side of the cash book. These cash books record cash transactions, bank transactions and discounts. Both cash and bank transactions of column cash books are balanced and totaled periodically; discount column of triple column cash books is only totaled, but not balanced. The cash and bank columns of triple column cash book are used as accounts and are periodically totaled and balanced just like in case of a double column cash book. It is not balanced because it does not work as an account.

However, new users can use it as a basic building block to create a sophisticated three-column cash book. The financial balance of a real estate or personal ledger account that was carried over to the following accounting period is known as the Balance Carried Down (Bal c/d). In other words, this represents the ledger account’s closing balance.

Step-by-Step Procedures to Create Three Column Cash Book in Excel

Cash discount acts as an incentive for credit customers to settle their debts quickly (prompt payment). Cash discount can be allowed to credit customers and received from credit suppliers. A contra entry is when an entry is made on the debit side and the same entry is recorded on the credit side of the cash book.

A 3-column cash book is used to record cash discount allowed, cash discount received, cash and cheques received and paid during the year. The amount column in the ledger is sub divided into 3 columns each side. Discount allowed is recorded on the debit side and discount received on the credit side.

What is a Three Column Cash Book?

The procedure of posting entries from a cash book to ledger accounts has been explained in single column cash book article. The same procedure is followed for posting entries from double as well as triple column cash book to ledger accounts. The difference between the two types of cash book is that a double cash book has two money columns (cash and bank) whereas a triple column cash book has three money columns (cash, bank and discount). If a cheque is received and deposited into a bank account on the same date, it will appear on the debit side on the cash book in the bank column.

• The three-column cash book is a very powerful financial tool.
• An overview of this procedure is given on the double column cash book page.
• The surplus money obtained by deducting the smaller CR totals from the larger DR totals of a certain ledger account is known as the Balance Brought Down (Bal b/d).
• Thus, when cash is paid into bank, the entry is Bank Account Dr. to Cash Account.
• Goods purchased on credit from Sam, list price $ less 5% trade discount.

A bank account may have an overdrawn balance because by arranging an overdraft with the bank, it is possible that more money may be withdrawn from the bank than what was deposited. If the debit column is larger than the credit column, the difference represents cash at bank. If, on the other hand, the credit column exceeds the debit column, the difference represents “overdrawn balance”. Whenever it is necessary to determine the bank balance, the bank columns are summed on both sides. It is worth mentioning that the format of a three column cash book is similar to that of a two column cash book.

Fact Checked

Trade discount is a reduction in the list price of goods by a manufacturer/wholesaler to another business. It is calculated on invoices and is not recorded in the double entry books of account. It is provided due to business consideration such as trade practices, bulk orders and market competition.

From the following particulars write up the cash book of Rashid Khwaja Trading Co. for the month of October, 2016. Received from customer a check for Rs. 775 in full settlement of his accounts (not deposited). Hussain a check for Rs. 2,550 in part payment https://turbo-tax.org/amended-tax-return/ of his account (not deposited). About the Author – Dr Geoffrey Mbuva(PhD-Finance) is a lecturer of Finance and Accountancy at Kenyatta University, Kenya. He is an enthusiast of teaching and making accounting & research tutorials for his readers.