Stion.
In a three column cash book
Answer Your Question
A Only cash and discount columns are balanced
BOnly bank and discount columns are balanced
COnly cash and bank columns are balanced
D Cash, Bank and Discount columns are balanced
Answers
Answer:
The triple column cash book (also referred to as three column cash book) is the most exhaustive form of cash book which has three money columns on both receipt (Dr) and payment (Cr) sides to record transactions involving cash, bank and discounts. A triple column cash book is usually maintained by large firms which make and receive payments in cash as well as by bank and which frequently receive and allow cash discounts.
The procedure of recording transactions in a triple/three column cash book is similar to that of a double column cash book. The only difference between two types of cash book is that a double column cash book has two money columns (i.e., cash and bank) whereas a triple column cash book has three money columns (i.e., cash, bank and discount).
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. The discount column is only totaled. It is not balanced because it does not work as an account.
In general ledger, two separate accounts are maintained for discount allowed and discount received. The total of discount column on debit side of cash book represents the total cash discount allowed to customers during the period and is posted to the discount allowed account maintained in the ledger. The total of discount column on credit side represents the total cash discount received from suppliers during the period and is posted to the discount received account maintained in the ledger.
Discount allowed is an expense and discount received is an income of the business.
Explanation: