The correct answer is: C. Three columns cash book
A three-column cash book is a type of cash book that has three columns: one for cash receipts, one
for cash payments, and one for discounts. This type of cash book is used by businesses that need to track both their cash receipts and cash payments, as well as any discounts they may receive.A simple cash book is a type of cash book that has only two columns: one for cash receipts and one for cash payments. This type of cash book is used by businesses that do not need to track discounts.
A petty cash book is a type of cash book that is used to track small cash transactions. Petty cash books typically have only one column for cash payments.
Here is a table that summarizes the key differences between the three types of cash books:
| Type of cash book | Columns | Purpose |
| — | — | — |
| Simple cash book | 2 | Tracks cash receipts and cash payments |
| Three columns cash book | 3 | Tracks cash receipts, cash payments, and discounts |
| Petty cash book | 1 | Tracks small cash transactions |