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In this video, the topic of discussion is the letter of guarantee. The tutorial explains the definition of a letter of guarantee, using a real-life example for clarity. In the example, XYZ Company intends to purchase goods worth 1 million from ABC Company, which requires a letter of guarantee before delivering the items. XYZ approaches their bank to obtain this letter, and the bank verifies whether XYZ qualifies for it. Once satisfied, the bank issues the legal document for the specified amount, with a validity period that may vary (e.g., 30, 90, or 120 days). The video also covers the complete general entries relevant to this concept.