CBSE Class 11 Accountancy Depreciation Provisions And Reserves Notes

Download CBSE Class 11 Accountancy Depreciation Provisions And Reserves Notes in PDF format. All Revision notes for Class 11 Accountancy have been designed as per the latest syllabus and updated chapters given in your textbook for Accountancy in Standard 11. Our teachers have designed these concept notes for the benefit of Grade 11 students. You should use these chapter wise notes for revision on daily basis. These study notes can also be used for learning each chapter and its important and difficult topics or revision just before your exams to help you get better scores in upcoming examinations, You can also use Printable notes for Class 11 Accountancy for faster revision of difficult topics and get higher rank. After reading these notes also refer to MCQ questions for Class 11 Accountancy given our website

Depreciation Provisions And Reserves Class 11 Accountancy Revision Notes

Class 11 Accountancy students should refer to the following concepts and notes for Depreciation Provisions And Reserves in standard 11. These exam notes for Grade 11 Accountancy will be very useful for upcoming class tests and examinations and help you to score good marks

Depreciation Provisions And Reserves Notes Class 11 Accountancy

class_11_Accountancy_concept_13

“Depreciation is gradual and permanent decrease in the value of an asset from any cause.” – Carter

Introduction:

Every fixed asset loses its value due to use or other reasons. This decline in the value of asset is known as depreciation

. Meaning of Depreciation:

Depreciation may be described as a permanent, continuing and gradual shrinkage in the book value of fixed assets.

Features of Depreciation:

(1) It is decline in the book value of fixed assets.

(2) It is a continuing process.

(3) It includes loss of value due to efflux ion of time, usage or obsolescence.

(4) It is an expired cost and must be deducted before calculating taxable profit.

Causes of Depreciation:

(1) Wear and tear due to use or passage of time.

(2) Obsolescence.

(3) Expiration of legal rights.

(4) Abnormal factors.

Need or Objectives of Depreciation:

(1) To ascertain the true profit or loss.

(2) For consideration of tax.

(3) To ascertain the true and fair financial position.

(4) Compliance with legal provisions. 

Factors or Basis for providing Depreciation:

(1) Cost of asset.

(2) Estimated net residual value.

(3) Depreciable cost.

(4) Estimated useful life.

Methods of calculating Depreciation:

(1) Straight line method (Fixed installment method):

This method is based on the assumption of equal usage of time over asset‟s entire useful life. According to this method a fixed and equal amount is charged as depreciation in every accounting period during the life time of an asset. Depreciation amount can be calculated by the following formula:

 class_11_Accountancy_concept_14

(2) Written Down value method(Diminishing balance method):

In this method depreciation is charged on the book value of tha asset. The amount of depreciation reduces year after year.

Difference between Straight line method and written down value method:

Methods of recording Depreciation:

(1) When depreciation is charged to asset account:

In this method depreciation is deducted from the asset value and charged (debited) to profit and loss account. Journal entries for recording under this method are as follows.

(a) For purchase of an asset

           Asset A/c Dr.

               To Bank/ vendor A/c

                            (With the cost of an asset including installation expenses, freight etc.)

(b) Following entries are recorded at the end of each year

            (i) Depreciation A/c Dr.

                    To Asset A/c

                    (With an amount of depreciation)

(ii) Profit and loss A/c Dr.

            To Depreciation A/c

                       (With an amount of depreciation)

(2) When provision for depreciation/Accumulated depreciation account is maintained:

Following journal entries are recorded at the end of each year.

CBSE Class XI Accountancy - Depreciation, Provisions and Reserves

CBSE Class XI Accountancy - Depreciation, Provisions and Reserves

CBSE Class XI Accountancy - Depreciation, Provisions and Reserves

CBSE Class XI Accountancy - Depreciation, Provisions and Reserves

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*Other Important Topics
CBSE Class 11 Accountancy Topics For Projects
Chapter 1 Introduction to Accounting
CBSE Class 11 Accountancy Introduction To Accounting Concepts And Illustrations
CBSE Class 11 Accountancy Introduction To Accounting Notes
Chapter 2 Theory Base of Accounting
CBSE Class 11 Accountancy Theory Base Of Accounting Concepts And Illustrations
CBSE Class 11 Accountancy Theory Base Of Accounting Notes
Chapter 3 Recording of Transactions-I
CBSE Class 11 Accountancy Recording Of Transaction Concepts And Illustrations
CBSE Class 11 Accountancy Recording Of Transaction Notes
Chapter 6 Trial Balance and Rectification of Errors
CBSE Class 11 Accountancy Rectification Of Error Concepts And Illustrations
CBSE Class 11 Accountancy Rectification Of Error Notes
Chapter 7 Depreciation, Provisions and Reserves
CBSE Class 11 Accountancy Depreciation Provisions And Reserves Concepts And Illustrations
CBSE Class 11 Accountancy Depreciation Provisions And Reserves Notes
Chapter 8 Bill of Exchange
CBSE Class 11 Accountancy Accounting For Bills Of Exchange Notes Set A
CBSE Class 11 Accountancy Accounting For Bills Of Exchange Notes Set B
CBSE Class 11 Accountancy Accounting For Bills Of Exchange Notes Set C
Chapter 9 Financial Statements - I
CBSE Class 11 Accountancy Financial Statements Concepts And Illustrations
CBSE Class 11 Accountancy Financial Statements Notes
Chapter 11 Accounts from Incomplete Records
CBSE Class 11 Accountancy Accounts For Incomplete Records Notes Set A
CBSE Class 11 Accountancy Accounts For Incomplete Records Notes Set B
Chapter 13 Computerised Accounting System
CBSE Class 11 Accountancy Computers And Accounting Information System Notes Set A
CBSE Class 11 Accountancy Computers And Accounting Information System Notes Set B
More Notes Class 11 Accountancy
CBSE Class 11 Accountancy Full Study Material
CBSE Class 11 Accountancy Preparation Of Ledger TB And BRS Notes
CBSE Class 11 Accountancy Preparation Of Ledger Trial Balance Concepts And Illustrations

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