Characteristics of Narration

Characteristics of Narration

In this article we would briefly explain the important characteristics of accounting narration. Accounting narration is a brief description of financial transaction.

Important Characteristics of Accounting Narration

Some important characteristics of accounting narration include description of transaction, length of narration. Place of accounting narration etc. These characteristics have been briefly explained below;

1.   Description of Transaction

Accounting narration is a brief description of financial transaction and this description is written with each transaction in the journal.

2.   Improve understanding

Accounting narration improves the understanding of financial transaction. This narration has more relevance for people, who do not possess accounting qualification.

3.   Length of Narration

Accounting narration should be brief and comprehensive. Ideally, the length of description should not exceed one line. Thus we can say that ideal narration is one liner.

4.   Narration is not Mandatory

Accounting narration is not mandatory requirement of accounting. However, some business may require adding the narration due to complex nature of transactions, while other business may maintain the journal without adding narration.

5.   Place of Accounting Narration

Accounting narration is written below the each transaction.

6.   Examples of Accounting Narration

Accounting narration of the following transaction is given below

Date	Particular	Folio	Dr.	Cr.
21.08.2016	Plant		10,000
	Sameer			10,000

Plant purchased from sameer on credit @ 10,000.

Some example of accounting narration are written below

a.    Sales made to Aslam on credit of $ 100.

b.    Sales made on cash of $ 200.

c.    Purchased plant from Ali $ 1000 on credit.

d.    20 Chairs purchased from Khan @ $ 5 each on credit.

7.   List of Characteristics of Accounting Narration.

Some important characteristics of accounting are listed below

a.    It is a brief description of accounting transaction.

b.    It is not a mandatory requirement.

c.    It must be short & comprehensive.

d.    It improves the understanding of transaction.