To determine which statement is not correct, we need to analyze each option based on our understanding of fundamental accounting principles:

1. Capital account has a debit balance: 
   This statement is incorrect. According to the principles of accounting, the capital account typically has a credit balance. This is because the capital account represents what the business owes to the owner (liabilities), and liabilities traditionally have credit balances. Therefore, the correct answer to the question is this option.
2. Discount column of cash book records cash discount: 
   This statement is correct. Cash books often have columns for cash discounts, which are reductions offered to customers as an incentive for early payment of their bills.
3. Under traditional approach, rent outstanding is a personal account: 
   This statement is correct. According to the traditional or classical approach in accounting, any account representative of an individual or group is a personal account, including outstanding expenses like rent. Outstanding Rent is considered a representative personal account.
4. Cash sales are not recorded in the sales day book: 
   This statement is correct. The sales day book is used to record credit sales transactions only, not cash sales. Cash sales are directly recorded in the cash book.

From the analysis above, we can conclude that the statement "Capital account has a debit balance" is not correct, aligning with accounting fundamentals.