Three-Column Cash Book Format
The Three-Column Cash Book is a book of prime entry that also serves as a ledger account, recording all cash and bank receipts and payments together with cash discount columns. It is used when a business deals in both cash and cheques, and it replaces the Cash Account and Bank Account in the ledger. The discount columns are memorandum columns that are only totalled and then posted to the Discount Allowed and Discount Received accounts.
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Blank format
| Date | Particulars | Fo | Discount Allowed | Cash | Bank | Date | Particulars | Fo | Discount Received | Cash | Bank |
|---|---|---|---|---|---|---|---|---|---|---|---|
| xx | Balance b/d | xx | XX | XX | xx | xx | xx | XX | XX | XX | |
| xx | xx | xx | XX | XX | XX | xx | xx | xx | XX | XX | XX |
| xx | xx | C | XX | xx | Balance c/d | XX | XX | ||||
| XX | XX | XX | XX | XX | XX | ||||||
| xx | Balance b/d | XX | XX |
The debit side (left) records receipts; the credit side (right) records payments; the discount columns are only totalled, not balanced.
Divide the page into two symmetrical sides (debit on the left, credit on the right), each with three money columns: Discount, Cash and Bank. Mark contra entries with the letter 'C' in the Fo column, balance off the Cash and Bank columns with balance c/d before totalling, and bring the balance b/d down below the double ruling.
Parts of the format
- Two symmetrical sides (Dr and Cr)
- The debit side records all cash and bank receipts; the credit side records all cash and bank payments.
- Discount columns (memorandum)
- Discount Allowed on the debit side and Discount Received on the credit side; these columns are only totalled and posted to the respective discount accounts, not balanced.
- Cash column
- Records physical cash transactions; balanced to show the cash in hand.
- Bank column
- Records cheque and bank account transactions; balanced to show the bank balance.
- Contra entry (C)
- When cash is banked or withdrawn from the bank, both entries fall within the same book and are marked 'C' in the Fo column.
- Balance b/d and balance c/d
- The Cash and Bank columns are balanced with balance c/d at period end, totalled, then balance b/d is brought down for the next period.
Filled example
Seri Murni Grocery, owned by Puan Aminah, began June 2024 with a cash balance of RM500 and a bank balance of RM8,000. During the month the business received a cheque of RM2,000 from Ali (discount allowed RM100), made cash sales of RM1,200, paid Baba by cheque RM1,500 (discount received RM50), paid wages of RM300 in cash, and banked RM800 cash.
| Date | Particulars | Fo | Discount Allowed | Cash | Bank | Date | Particulars | Fo | Discount Received | Cash | Bank |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 Jun | Balance b/d | 500 | 8,000 | 12 Jun | Baba | 50 | 1,500 | ||||
| 3 Jun | Ali | 100 | 2,000 | 15 Jun | Wages | 300 | |||||
| 8 Jun | Sales | 1,200 | 20 Jun | Bank | C | 800 | |||||
| 20 Jun | Cash | C | 800 | 30 Jun | Balance c/d | 600 | 9,300 | ||||
| 100 | 1,700 | 10,800 | 50 | 1,700 | 10,800 | ||||||
| 1 Jul | Balance b/d | 600 | 9,300 |
The Cash column balances (1,700 = 1,700) and the Bank column balances (10,800 = 10,800); the Discount Allowed total of RM100 and Discount Received total of RM50 are posted to the discount accounts.
Common layout errors
Related chapters and procedures
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