In order to incorporate bank transactions (receipts and payments by cheque) which are allowed by the business to its customers and cash discounts. Triple Column Cash Book is prepared by adding one additional column with Double Cash Book. So Triple Column Cash Book is a Cash book which has three columns on either side to record Cash, Bank and Discount transactions.
In the debit side of Triple Column Cash Book, cash receipt, cheque receipts and cash discount columns respectively. Similarly in the credit side of Triple Column Cash Book payment of cash, payment by cheque and cash discount received are recorded in Cash, Bank and Discount columns respectively. The transactions which affect cash and bank account at a time are called contra entries and are recorded in both sides of Triple Column Cash Book. The balance of cash column is the closing cash in hand, the balance of bank column is the cash at bank or bank overdraft. The discount column is not balanced but only totaled.