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Revision Notes

Depreciation Accounting — Revision Notes

Telangana Open School (TOSS) · Class 12 · Accountancy

Depreciation Accounting revision notes for Telangana Open School (TOSS) Class 12 Accountancy: 4 topics in quick points.

38 questions30 flashcards5 concepts

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Key Topics to Revise

1

Meaning and Concept of Depreciation

  • Depreciation is the gradual and permanent decrease in the value of a fixed asset due to usage, time, or obsolescence.
  • It is an expense charged to the Profit and Loss Account each year.
  • Depreciation ensures that the asset's cost is allocated over its useful life.
2

Causes of Depreciation

  • Normal wear and tear due to usage (e.g., machinery losing efficiency).
  • Physical deterioration due to passage of time (e.g., furniture decaying even when unused).
  • Obsolescence due to technological advancements (e.g., old computers replaced by faster models).
3

Objectives of Charging Depreciation

  • To show the true financial position by correctly valuing assets in the Balance Sheet.
  • To calculate true profit by charging depreciation as an expense in the Profit and Loss Account.
  • To retain sufficient funds in the business for replacing the asset when it wears out.
4

Factors Affecting Depreciation

  • Cost of the asset: includes purchase price, transportation, installation, and setup costs.
  • Useful life: the estimated number of years the asset will be used productively.
  • Scrap value: the estimated resale value of the asset at the end of its useful life.

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Full Notes

Key Concepts

Depreciation is the gradual reductionDepreciation occurs due to (i) normalThe main objectivesFour key factorsIn this method

Frequently Asked Questions

What are the important topics in Depreciation Accounting for Telangana Open School (TOSS) Class 12 Accountancy?
Key topics in Depreciation Accounting include Meaning and Concept of Depreciation, Causes of Depreciation, Objectives of Charging Depreciation, Factors Affecting Depreciation. Study these first, then practise questions on each for the Telangana Open School (TOSS) Class 12 board exam.
How should I revise Depreciation Accounting for the Telangana Open School (TOSS) Class 12 board exam?
Learn the core ideas first, then work through the 38 practice questions on Depreciation Accounting. 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 Accounting

All Telangana Open School (TOSS) Class 12 Accountancy Revision Notes

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