Q.Why must every journal entry carry a narration? Illustrate with an entry that would be misleading without one.

A narration is what turns a bare set of numbers into a transaction a reader can actually understand and audit. …

A narration is the brief explanation, written in brackets immediately below a journal entry, describing what the transaction actually was. It is compulsory because the debit and credit account names alone do not tell a reader — an auditor, a new accountant taking over the books, or the business owner reviewing the year later — why the entry was made.

Consider the bare entry:

Cash A/c …Dr. ₹10,000

To Ram A/c ₹10,000

On its own, this could mean at least three very different things: Ram repaying a loan the business had given him, Ram (a debtor) settling an amount he owed for goods bought earlier, or Ram (unusually) making a cash gift to the business. Without a narration such as "(Being loan given to Ram now repaid in cash)", no one — not even the person who made the entry, a year later — can reliably tell which of these actually happened, which matters enormously if the entry is ever questioned, audited, or used as evidence. …

Treating narration as optional 'extra detail' rather than a required part of a correct journal entry — an ent …