1. Structure of a Three-Column Cash Book
The Three-Column Cash Book serves a dual purpose: it acts as a special journal for daily transactions and functions as the Ledger Account for both Cash and Bank. It contains three distinct monetary columns on both the Debit (Receipts) side and the Credit (Payments) side.
                                  DEBIT SIDE (Receipts)
========================================================================================
Date       Explanation     Ref    Discount Allowed ($) | Cash Column ($) | Bank Column ($)
-------------------------------------------------------+-----------------+--------------
2026-07-01 Customer Alpha  SJ01           50           |                 |     2,450


                                  CREDIT SIDE (Payments)
========================================================================================
Date       Explanation     Ref    Discount Received ($) | Cash Column ($) | Bank Column ($)
--------------------------------------------------------+-----------------+--------------
2026-07-04 Supplier Omega  PJ01           30            |                 |     1,470

2. Cash vs. Bank Columns
  • Cash Column: Tracks physical paper money and coins held on-site in the office safe.
  • Bank Column: Tracks digital money held securely within the company’s commercial bank account.

3. Handling Discounts: Allowed vs. Received
  • Discount Allowed: A prompt-payment discount given to credit customers. It is an expense and is recorded in the Debit column.
  • Discount Received: A prompt-payment discount given to the business by suppliers. It is an income item and is recorded in the Credit column.
  • Note: The discount columns are not balanced off against each other. Instead, they are totaled at the end of the month and posted directly to their respective ledger accounts.

 
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