It records information from other correspondence (information that is not recorded in the above books of prime entry). It explains the type of entries that will be made in the ledger accounts giving a reason for these entries.
The type of transactions recorded here are:
- Writing off of assets from the accounts e.g. bad-debts.
- Drawings for goods or other assets from the business by the owner, not cash drawings.
- Purchase or sale of non-current assets on credit.
The format is as shown: