CA Foundation Exam > CA Foundation Questions > While balancing three column cash book, the d...
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While balancing three column cash book, the discount columns are:
- a)Totaled but not adjusted
- b)Totaled and also adjusted
- c)Totaled but not balanced
- d)Balanced but not totaled
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
While balancing three column cash book, the discount columns are:a)Tot...
When three column cash book is kept, discount columns are totaled but not balanced. Total of debit side discount column will be transferred to debit side of P/L A/c and total of credit side discount column will be transferred to credit side of P/L A/c.
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Most Upvoted Answer
While balancing three column cash book, the discount columns are:a)Tot...
Explanation:
Discount Columns in a Three Column Cash Book:
In a three column cash book, there are three main columns - cash column, bank column, and discount column. The discount column is used to record any discounts received or paid by the business.
Function of the Discount Columns:
The discount columns are used to keep track of any trade discounts given or received by the business. These discounts are usually related to early payment of invoices or bulk purchases.
Discount Columns in Balancing:
When balancing a three column cash book, the discount columns are totaled to calculate the total discounts given or received during a specific period. However, these totals are not adjusted in the process of balancing the cash book.
Reason for Not Adjusting Discount Columns:
The discount columns are not adjusted during the balancing process because they represent specific transactions related to discounts and are not part of the regular cash or bank transactions. Adjusting these columns could lead to inaccuracies in the accounting records.
Conclusion:
In conclusion, while balancing a three column cash book, the discount columns are totaled to calculate the total discounts given or received, but they are not adjusted as they represent specific discount transactions and are not part of the regular cash or bank transactions.
Discount Columns in a Three Column Cash Book:
In a three column cash book, there are three main columns - cash column, bank column, and discount column. The discount column is used to record any discounts received or paid by the business.
Function of the Discount Columns:
The discount columns are used to keep track of any trade discounts given or received by the business. These discounts are usually related to early payment of invoices or bulk purchases.
Discount Columns in Balancing:
When balancing a three column cash book, the discount columns are totaled to calculate the total discounts given or received during a specific period. However, these totals are not adjusted in the process of balancing the cash book.
Reason for Not Adjusting Discount Columns:
The discount columns are not adjusted during the balancing process because they represent specific transactions related to discounts and are not part of the regular cash or bank transactions. Adjusting these columns could lead to inaccuracies in the accounting records.
Conclusion:
In conclusion, while balancing a three column cash book, the discount columns are totaled to calculate the total discounts given or received, but they are not adjusted as they represent specific discount transactions and are not part of the regular cash or bank transactions.
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While balancing three column cash book, the discount columns are:a)Totaled but not adjustedb)Totaled and also adjustedc)Totaled but not balancedd)Balanced but not totaledCorrect answer is option 'C'. Can you explain this answer?
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