A three column cash book, also known as a triple column cash book, contains three money columns on both the debit and credit sides: one on each side for recording discount, cash, and bank amounts.

If a business holds a bank account frequently makes receipts and payments through that bank account, then it is useful to maintain a three column cash book rather than a single or double column cash book.

It is customary for businesses to allow discounts for early payments. For example, if cash is paid early, creditors may receive a discount. On the other hand, if debtors pay early, a discount may be allowed to them.

You may remember that cash and discounts are closely related. This is the reason why discount columns are also provided in the cash book.

In a three column cash book, three columns are provided for the amounts on each side. One column records cash receipts and payments, the second records banking transactions, and the third records discounts received and allowed.

Although single and double column cash books are alternatives to a cash account, the three column cash book serves the purpose of cash as well as a bank account.