Drew form bank for office use
In three column cash book
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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 hand40,000May 1:Cash at Bank30,000May 3:Goods sold for cash9,000May 5:Goods bought for cash18,000May 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 1,0001,000May 31:Bank debited bank charges . 1,4001,400
Solution:
Three Column Cash Book
DateParticularsV/NL/FDiscount
Allowed $Cash
$Bank
$DateParticularsV/NL/FDiscount
Received
$Cash
$Bank
$1.5.05Balanced b/d 40,00030,0005.5.05Purchase A/c 18,000 3.5.05Sales A/c 9,000 11.5.05Zulfqar A/c 60010,0009,4008.5.05M.Farooq A/c 300 19,30017.5.05Adnan A/ 1003,900 15.5.05M Kaleem A/c 2009,800 23.5.05Akif A/c 3007,800 20.5.05Asim Tufail A/c 2007,800 31.5.05Bank charges A/c 1,40025.5.05Interest A/c 1,00031.5.05Balance c/d 26,90039,500 70066,60050,300 1,00066,60050,300
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 book700
Discount Received A/C
31.5.2005
Sundry Discount A/C
as per cash book1,000
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 hand40,000May 1:Cash at Bank30,000May 3:Goods sold for cash9,000May 5:Goods bought for cash18,000May 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 1,0001,000May 31:Bank debited bank charges . 1,4001,400
Solution:
Three Column Cash Book
DateParticularsV/NL/FDiscount
Allowed $Cash
$Bank
$DateParticularsV/NL/FDiscount
Received
$Cash
$Bank
$1.5.05Balanced b/d 40,00030,0005.5.05Purchase A/c 18,000 3.5.05Sales A/c 9,000 11.5.05Zulfqar A/c 60010,0009,4008.5.05M.Farooq A/c 300 19,30017.5.05Adnan A/ 1003,900 15.5.05M Kaleem A/c 2009,800 23.5.05Akif A/c 3007,800 20.5.05Asim Tufail A/c 2007,800 31.5.05Bank charges A/c 1,40025.5.05Interest A/c 1,00031.5.05Balance c/d 26,90039,500 70066,60050,300 1,00066,60050,300
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 book700
Discount Received A/C
31.5.2005
Sundry Discount A/C
as per cash book1,000
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