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Depreciation, Provisions and Reserves

Madhya Pradesh Board · Class 11 · Accountancy

Complete topic list for Depreciation, Provisions and Reserves in Madhya Pradesh Board Class 11 Accountancy. Key concepts, sub-topics, and what to focus on for board exams.

155 questions76 flashcards5 concepts

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4 Topics · Madhya Pradesh Board Class 11 Accountancy

Topics in Depreciation, Provisions and Reserves

1

1. Meaning and Nature of Depreciation

  • Depreciation means decline in the value of a fixed asset due to use, passage of time, or obsolescence.
  • It is a permanent, continuing and gradual shrinkage in the book value of fixed assets.
  • Depreciation is an expired cost charged against revenue.
2

2. Depletion, Amortisation and Causes of Depreciation

  • Depletion is used for natural resources like mines and quarries.
  • Depreciation relates to the usage of an asset, while depletion relates to exhaustion of economic resources.
  • Amortisation is writing-off the cost of intangible assets like patents, copyright, trade marks, franchises and goodwill.
3

3. Need for Charging Depreciation and Factors Affecting It

  • Depreciation helps in matching costs with revenue.
  • It is charged like salary, carriage and postage.
  • It is required to compute true profit or loss.
4

4. Methods of Calculating Depreciation

  • Only two methods of depreciation are mandated by law and enforced by professional accounting practice in India: straight line method and written down value method.
  • Other methods include annuity method, depreciation fund method, insurance policy method, sum of years digit method and double declining method.
  • The chosen method should be applied consistently from period to period.

Key Concepts

Central concept: Depreciation, Provisions and Reserves in Financial Accounting

DepreciationProvisionsReservesSimilar termsMethods of recording depreciation

Frequently Asked Questions

What are the important topics in Depreciation, Provisions and Reserves for Madhya Pradesh Board Class 11 Accountancy?
Depreciation, Provisions and Reserves covers several key topics that are frequently asked in Madhya Pradesh Board Class 11 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Depreciation, Provisions and Reserves — Madhya Pradesh Board Class 11 Accountancy?
Understand the core concepts first, then work through the 155 practice questions available for this chapter. Revise formulas and 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.

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