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What is the treatment of cash discounts versus the cash received in the cash book?

Intermediate

Answer

When a customer settles early taking a cash discount, the cash book records the actual cash in the bank/cash column and the discount in the discount-allowed column; together they clear the invoice. The cash column affects the double entry immediately; the discount column is a memorandum posted in total to discounts allowed.
Invoice 500, pay 490 + 10 discount: Bank 490 + Discount allowed 10 = 500 cleared.
Real-world example Early payment records 490 in the bank column and 10 in the discount column to settle a 500 invoice.

Common follow-ups: Which part is a memorandum? | How is the invoice fully cleared?

Sales & Purchase Ledgers Control Accounts Cash Book & Petty Cash
All 26 Cash Book & Petty Cash questions