Education and Career Forum

(a) Differentiate between a petty cashbook and a three-column cashbook.
(4 marks)

(b) Briefly explain why it is important for a business entity to prepare a bank reconciliation statement. (3 marks)

Can someone please provide answer hurry up please.

Differentiate between a petty cashbook and a three-column cashbook are :-

Three Column Cash Book – Definition and Format:
If cash discounts are allowed to customers or received from suppliers then discount columns are also added to the left of cash and bank columns. The receipts of cash, cheque and cash discount allowed are entered on the debit side with their dates. The payments of cash, cheque and cash discount received are entered on the credit side with their dates.

Petty cash Book - There are occasions when business makes small payments in cash as where cheques may be unacceptable. In that case, a petty cash book may be prepared for recording cash transactions.