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Question

In a Three-Column cash book, which of the following is correct?

A
Cash discount received is recorded on the debit side of cash book
B
Cash discount received is recorded on the credit side of cash book
C
Trade discount allowed is recorded on the debit side of cash book
D
Discount columns are balanced
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Solution
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Correct option is B. Cash discount received is recorded on the credit side of cash book
A three column cash book includes three amount columns on both sides, i.e., cash, bank and discount. A three column cash book includes three amount columns on both sides, i.e., cash, bank and discount. Discount column on debit side is for discount allowed and discount column on credit side is for discount received.
Therefore, B is the correct option.

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