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unit-7-subsidiary-books---cash-book

Unit-7 Subsidiary Books - Cash Book

In this unit you will learn about the most important subsidiary book called Cash Book.

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How do you post entries from the discount allowed discount received columns to the Discount Allowed Account and Discount Received Account in the ledger? 


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Learning Pundits Content Team

Written on Jun 25, 2019 2:15:18 PM

As for the transactions relating to cash, the double entry is complete as soon as postings have been made to the respective personal accounts. But it is not so for the discount aspect. The cash book does not serve the purpose of discount account. We have to open 'Discount Allowed Account' and 'Discount Received Account' in the ledger. The total of discount allowed columns on the debit side of the cash book is posted to the debit side of the 'Discount Allowed Account' in the ledger by writing 'To Sundries'. 

Similarly, the total of discount received column on the credit side of the cash book is posted to the credit side of the 'Discount Received Account' in the ledger by writing 'By Sundries'. This will complete the double entry in respect of discount allowed and discount received. Note that the postings in the two discount accounts are made only for the totals and not for the individual transactions. Thus we save time and labor.