Three-Column Running Balance Format (Cambridge (CIE) IGCSE Accounting): Revision Note

If the balance changes between debit and credit, such as the bank account, then the words "debit" and "credit" are written after each balance.

If the balance is always a debit or always a credit, then the account might not write this next to the balances.

Kamala is a trader. Bruno is a credit customer. At 1 December 2025, Bruno owes Kamala $550.

The following transactions take place in December 2025:

• 3 Dec: Bruno settles an invoice for $500 by paying $475 by bank transfer

• 5 Dec: Bruno purchases goods with list price $230 on credit

• 13 Dec: Bruno returns unpaid goods with list price $70

Complete Bruno's account in the books of Kamala.

Bruno

Answer:

• 3 Dec: Bruno settles an invoice for $500 by paying $475 by bank transfer

  • $475 is paid into Kamala's bank

  • $25 is discount allowed by Kamala

  • Reduce the amount Bruno owes

  • These are credit entries as the asset is decreasing

• 5 Dec: Bruno purchases goods with list price $230 on credit

  • Increase the amount Bruno owes

  • This is a debit entry as the asset is increasing

• 13 Dec: Bruno returns unpaid goods with list price $70

  • Reduce the amount Bruno owes

  • These are credit entries as the asset is decreasing

Bruno

At 1 December 2025, Kamala is £150 overdrawn on her bank account.

The following transactions take place in December 2025:

• 3 Dec: Kamala receives $475 from Bruno by bank transfer

• 11 Dec: Kamala pays $200 for rent by cheque

• 18: Kamala receives a cheque for $180 from Amy

Complete Kamala's bank account. State whether each balance is a debit or credit balance.

Bank

Answer:

• 3 Dec: Kamala receives $475 from Bruno by bank transfer

  • This is a debit entry as the bank is increasing

    • The current balance is a credit so subtract

    • A negative answer means the balance changes from a credit to a debit

• 11 Dec: Kamala pays $200 for rent by cheque

  • This is a credit entry as the bank is decreasing

    • The current balance is a debit so subtract

• 18: Kamala receives a cheque for $180 from Amy

  • This is a debit entry as the bank is increasing

    • The current balance is also a debit so add

Bank