Narration in accounting refers to the description or explanation of a financial transaction. In accounting, a narration is used to provide more information about a transaction and to explain why the transaction was made.
Narration is typically used in conjunction with journal entries to provide more context for the transaction. For example, if a business makes a payment to a supplier, the journal entry might include a debit to the accounts payable account and a credit to the cash account. The narration might include additional information about the transaction, such as the name of the supplier, the amount of the payment, and the purpose of the payment.
Narration is an important part of the accounting process because it helps to provide more information about a transaction and to ensure that the transaction is properly documented and understood. By including a narration with a journal entry, businesses can ensure that their financial records are accurate and complete, and that they are able to easily understand and explain their financial transactions.
