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Depreciation, Provisions and Reserves — Chapter Summary

CBSE · Class 11 · Accountancy

Summary of Depreciation, Provisions and Reserves for CBSE Class 11 Accountancy. Part of the CBSE Class 11 Accountancy syllabus.

155 questions76 flashcards3 formulas & key relations5 concepts

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Overview

Depreciation, provisions, and reserves are three important accounting ideas used to show a fair profit and a true financial position. Depreciation spreads the cost of a fixed asset over its useful life. Provisions are charges made for expected losses or expenses of the current period when the exact

Key Concepts

Depreciation is the decline in

Depreciation is the decline in the book value of tangible fixed assets due to use, passage of time, or obsolescence. It is an expired cost charged aga

Depreciable assets are fixed assets expected

Depreciable assets are fixed assets expected to be used for more than one accounting period, having a limited useful life, and used in production, sup

Depreciation depends on three main factors

Depreciation depends on three main factors: cost, useful life, and net residual value or salvage value. Cost includes acquisition, installation, commi

Wear and tear

Wear and tear, passage of time, expiration of legal rights, obsolescence, and abnormal factors like fire or flood can reduce the usefulness of an asse

Under this method

Under this method, the same amount of depreciation is charged every year on the original cost. It is also called fixed installment method or fixed per

Learning Objectives

  • Explain depreciation and distinguish it from amortisation and depletion
  • State the need for charging depreciation and identify its causes
  • Compute depreciation using straight line method and written down value method
  • Record transactions relating to depreciation and disposal of assets
  • Explain the meaning and purpose of provisions and reserves

Frequently Asked Questions

What are the important topics in Depreciation, Provisions and Reserves for CBSE Class 11 Accountancy?
Key topics in Depreciation, Provisions and Reserves include Meaning and Nature of Depreciation, Depletion, Amortisation and Causes of Depreciation, Need for Charging Depreciation and Factors Affecting It, Methods of Calculating Depreciation. Study these first, then practise questions on each for Class 11 exams.
How should I revise Depreciation, Provisions and Reserves for Class 11 exams?
Learn the core ideas first, then work through the 155 practice questions on Depreciation, Provisions and Reserves. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

More resources for Depreciation, Provisions and Reserves

All CBSE Class 11 Accountancy Chapter Summary

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