When cash is received from a debtor, some discount may be allowed to him. Similarly, when payment is made to a creditor, some discount may be allowed by him. This is termed as Cash Discount and it has to be recorded in the books of account. While making compound journal entries for such transactions, you learnt that cash and discount go together. Receipts from debtors and payments to creditors are to be recorded in the cash book. Now the question arises as to how to record the cash discount. One method is to record the discount aspect separately in the journal. But this would be cumbersome, and the possibility of failing to record can also happen. Hence accountants have developed a practice of recording the discount aspect in tile cash book itself. For this, an extra amount column is added on both sides of the cash book.