Glossary
Narrative
The short note under a journal entry explaining why it was made.
What it means
A brief explanation written beneath a journal entry stating the reason for the transaction.
Example
A journal entry to correct an error carries a narrative naming the error corrected.
Why it matters
It records the reason for an entry so the books can be understood and audited later.
In practice
A narrative is written directly beneath each journal entry in the general journal, indented under the debit and credit lines. It never carries a figure. It explains the reason for an entry that would otherwise be unclear. Examples are a correction, an opening balance, or the purchase of a non-current asset on credit.
For instance, a business debits Machinery RM9,000 and credits a trade payable RM9,000. The narrative might read: "Being purchase of machine on credit from a supplier." The word "Being" traditionally opens it.
Students often confuse the narrative with the folio. Both are supporting details in the journal. The folio is a short reference code that points to where the amount was posted. The narrative is a full sentence explaining why the entry exists. One tells you where. The other tells you why.
If journal entries and narratives are a weak spot, one of our teachers can practise them with you using past-paper corrections. Book a trial class.
Related terms
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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