Concept:A three-column cash book records cash, bank, and discount transactions together in one statement.
Explanation:When a business receives cash or makes payments with a discount, the transaction includes both a cash or bank amount and a discount amount.
The three-column cash book provides separate columns for cash, bank, and discount, allowing both amounts to be entered properly.
Discount allowed is recorded for discounts given to customers on receipts, while discount received is recorded for discounts obtained from suppliers on payments.
Since a two-column cash book and a petty cash book do not have a dedicated discount column, they cannot fully capture these transactions.
Therefore, receipts and payments involving discounts are entered in the three-column cash book.
Answer:A. three-column cash book