ZIMSEC O Level · Principles of Accounts · Form 3
The three-column cash book
Columns for discount, cash and bank on each side. Receipts on the debit side; payments on the credit side.
- Discount allowed is in the debit discount column; discount received in the credit discount column. Their totals are posted to the ledger.
- Contra entries: transfers between cash and bank are marked “C” and appear on both sides.
- A credit balance on the bank column means an overdraft.
Worked example: Moyo owes US$400 and pays by cheque, less 5% cash discount. Record it.
Discount 5% × 400 = 20. Debit side: discount 20, bank 380, details: Moyo.
Petty cash book (imprest system)
The petty cashier starts with a fixed float (the imprest). Small payments are analysed into columns (postage, cleaning, travel). At the end of the period, the amount spent is reimbursed to restore the imprest.
Worked example: Imprest US$100; spent during the month US$73. How much is reimbursed?
US$73, bringing the float back to US$100.
Exam tip: Cash cannot have a credit balance – you cannot spend more cash than you hold.
Check yourself
- What does “C” mean in a cash book?
- A customer owing US$600 pays cash less 2.5% discount. How much cash is received?
- Name one advantage of the imprest system.
Show answers
- A contra entry (transfer between cash and bank).
- US$585
- Any one: easy control of small payments, frees the main cashier, spending is checked at each reimbursement.
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