Narration

A journal entry is not considered complete merely because the correct accounts have been debited and credited with the correct amounts — every entry must also carry a narration.

Why a narration is necessary

• It explains, in plain words, WHAT the transaction actually was — a bare entry of "Cash A/c Dr. 5,000, To Sales A/c 5,000" does not by itself say whether the sale was for cash, whether it was against an old due, or anything else worth recording; the narration removes that ambiguity.
• It provides supporting detail that is useful at the time of audit or later verification, especially for an unusual or a compound entry.
• For a compound entry (§5) involving more than two accounts, the narration is often the ONLY place that makes clear how the single combined amount was actually arrived at.

How a narration is written. It is written in brackets, usually in smaller/italic text in a printed book, directly below the credit line of the entry, and always begins with the word "Being" (short for "this entry being made because…"). For example: (Being goods purchased from Suresh on credit) or (Being rent paid in cash for the month). …