Cambridge IGCSE and O Level Accounting

1.4 Introducing three column

cash books
Syllabus reference: 2.3 (excluding trade discount)
Learning aims: 1 explain the use of, and process, accounting information in the
cash book
2 process accounting data in the cash book
3 account for cash discount
4 explain the use of and record payments and receipts made by bank
transfers and other electronic means
Prior knowledge: Double entry and two column cash books
Resources: Coursebook Chapter 4
Workbook Part 2 Section 1 Multiple choice questions 10–11
Workbook Part 2 Section 1 Structured questions 20–22
Worksheet 1.4
You will also need:
Flashcards on bank and cash transactions
PowerPoint, slide or handout of a template of a three column
cash book 1
Template of a three column cash book on board

Suggested activities
1 Share the learning aims and outcomes with students and write on the board or use
a pre-prepared slide or PowerPoint
2 Teacher-led discussion about cash books
Refer to previous learning of two column cash books.
Discuss the advantages of preparing the cash and bank accounts in the cash book.
3 Teacher-led discussion on cash discount
Discuss why cash discount is granted and the advantages and disadvantages of this discount.
Using the prepared template of a three column cash book demonstrate how cash discount is
entered in the cash book.
Demonstrate on the board how cash discount is entered in the ledger.
4 Recording transactions in the three column cash book
Give each member of the class one or more cards containing a dated cash or bank transaction.
A contra entry, a direct debit and a standing order could also be included.
In the date order of the transactions, students should be invited to make the entry for the
transaction in the cash book template on the board.
One of the students could then balance the cash book following the instructions from the rest
of the group. Alternatively, students could complete the exercise individually on their handout.
5 Practical exercise as follow-up
Students working alone or in pairs prepare a three column cash book.

© Cambridge University Press 2018

Cambridge IGCSE and O Level Accounting

6 Follow-up in next lesson

The cash book prepared in this lesson could be used as a learning tool for double entry.
Students could be asked to place sticky notes with the relevant ledger accounts for the cash
book transactions.
Introduction of extended exercises such as the preparation of a three column cash book and
the postings to the ledger accounts.
Tasks for more confident students could include:
1 Research into the differences between a bank loan and a bank overdraft.
2 Consider the most suitable form of finance for various scenarios such as purchase of goods
for resale and the purchase of machinery.
7 Homework (or class work at start of next lesson)
Worksheet 1.4

© Cambridge University Press 2018