Important Questions for CBSE Class 11 Accountancy Chapter 7 – Depreciation, Provisions & Reserves

Important Questions Class 11 Accountancy Chapter 7 – Depreciation, Provisions, and Reserves

In accountancy, if businesses incur an expense for which they enjoy an extended benefit, according to the matching principle, the cost has to be spread out over time as the benefits are not just enjoyed in the time frame when it is incurring. Furthermore, it might not always be possible to ascertain the number of certain expenses. Therefore, following the Principle of Prudence, a reserve charged against the profits is created to take care of such costs.

Chapter 7 in Class 11 Accountancy deals with both of these concepts depreciation and provisions and reserves. The chapter is divided into two sections. Section 1 explains depreciation, the need for charging it and its causes, while Section 2 deals with creating reserves and their nature and the various types of reserves.

The Important Questions Class 11 Accountancy Chapter 7 provide essential insights into the chapter, easily explaining the crucial topics covered.

At Extramarks, we realise that practising is an integral part of accountancy; hence, lakhs of students choose Extramarks as their loyal study partner. With NCERT books, CBSE sample papers and reference books, students can have an all-rounded practice of Chapter 7 as it is considered an important chapter from the examination point of view. The experts at Extramarks answered questions for Important Questions Class 11 Accountancy Chapter 7, which will help students understand the core topics easily and help them score well in their examinations. 

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Access CBSE Class 11 Accountancy Important Questions and Answers

Class 11 Accountancy Chapter-wise important questions are available for free to students, and these questions are perfect for self-study.

Sign up and get complete access to CBSE Class 11 Accountancy Important Questions for other chapters too:

CBSE Class 11 Accountancy Important Questions
Sr No Chapters Chapter Name
1 Chapter 1 Introduction to Accounting
2 Chapter 2 Theory Base of Accounting
3 Chapter 3 Recording of Transactions– 1
4 Chapter 4 Recording of Transactions II (Financial Accounting – I)
5 Chapter 5 Bank Reconciliation Statement
6 Chapter 6 Trial Balance and Rectification of Errors
7 Chapter 7 Depreciation, Provisions, and Reserves
8 Chapter 8 Bill of Exchange
9 Chapter 9 Financial Statements – 1
10 Chapter 10 Financial Statements 2
11 Chapter 11 Accounts from Incomplete Records
12 Chapter 12 Applications of Computers in Accounting
13 Chapter 13 Computerised Accounting System

Important Questions Class 11 Accountancy Chapter 7 with Solutions

Depreciation, Provisions and Reserves can appear to be a complex chapter at first. Still, with the proper understanding of the basic concepts and practice of numerical questions, students will find this chapter interesting and easy to solve. 

To help students in gaining confidence for this chapter, here is a list of Important Questions Class 11 Accountancy Chapter 7 provided with solutions for students’ practice

Question 1. Which of the following depreciation methods is not recognised by Income Tax Law?

  1. Straight line method
  2. None of these
  3. Both, straight line and diminishing balance methods
  4. Diminishing balance method

Answer 1: a) Straight line method

Explanation: Depreciation can be calculated in a number of ways. The Income Tax Act does not recognise the written down value of depreciating assets, with the exception of businesses involved in production, distribution, and power generation.

Question 2. According to the Companies Act of 1956, secret reserves can be created by:

  1. Only private companies
  2. Banking and insurance companies
  3. Only public company
  4. Companies registered under the Companies Act

Answer 2: (b) Banking and insurance companies

Explanation: The term “secret reserve” refers to a reserve that is kept in place to improve a company’s financial position but is not recorded in the books. Only banking and insurance companies can create these reserves.

Question 3. At the end of the year, the depreciation account is transferred to :

  1. Balance sheet
  2. Trading account
  3. Profit & loss appropriation account
  4. Profit & loss account

Answer 3: d) Profit & loss account

Explanation: Every expense and revenue is transferred to the profit and loss account, and as depreciation is a non-cash expense at the end of the year, it is treated by transferring it to the P & L account.

Question 4. Dividend Equalisation Reserve is :

  1. Specific Reserve
  2. None of these
  3. Secret Reserve
  4. General Reserve

Answer 4: (a) Specific Reserve

Explanation: The purpose of the Dividend Equalisation Reserve is to guarantee that dividends stay steady despite fluctuations in earnings. It is created for a specific purpose and is called a Specific Reserve.

Question 5. Define depreciation.

Answer 5: Depreciation is defined as a permanent, continuous, and gradual decrease in the book value of fixed assets.  

Question 6. Name the different types of reserve.

Answer 6: Reserves are classified on the following basis 

  1. Based on purpose:
  • General Reserve
  • Specific Reserve
  1. Based on the nature of profits from which they are created:
  2. Revenue Reserve
  3. Capital Reserve 

Question 7. State briefly the need for providing depreciation.

Answer 7: The need for depreciation can be aptly explained by the following pointers:

  • Determining the actual profit and loss:

Accurate profit and loss can only be determined when all revenues and expenses are recorded in the P & L Account. Assets that are employed in production help the business to earn their income and their cost, i.e. depreciation is charged as an expense to the P & L Account.

  • Present unbiased financial statements:

If depreciation is not shown, the assets will appear on the balance sheet at a higher value than what they are; hence it will impact the projection of accurate and fair financial statements of the enterprise.

  • Production cost:

The depreciation charged on plant and machinery and other assets involved in the production is also included in the cost of production. If it is excluded, then the cost of production is undervalued, thus leading to lower sale prices and lesser revenues. 

  • Distributing dividends:

The profits will be overstated if depreciation is not charged. Not accounting for depreciation will lead to the projection of more profits to be distributed as dividends. The distribution of dividends can then lead to the moving away of essential resources from the capital of the business.

  • Tax considerations:

When businesses charge depreciation, the profit and loss account shows a lesser reported profit than when the depreciation is not charged. Depreciation can help companies to pay lesser taxes at the end of the accounting year.

  • Provide funds for asset replacement:

Depreciation isn’t a costly expense. Hence when depreciation is charged, the business retains that amount which it uses in future to replace the fixed assets after its practical term.

Question 8. The company purchased a plant on July 01 2015, at the cost of ₹ 3 00,000; it spent an additional ₹ 50,000 on the installation. 

The depreciation is charged at 15% p.a. based on the straight line method. The plant was then sold for ₹ 1,50,000 on October 01 2017. A new plant was installed on the same date amounting to ₹ 4,00,000 including purchasing value. The accounts for the business are closed on December 31 yearly.

You are to show the machinery account and provision for depreciation account for three years.

Answer 8: 

Plant Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
2015 2015
July.01 Bank 3,50,000 Dec.31 Balance c/d 3,50,000
3,50,000 3,50,000
2016 2016
Jan.01 Balance b/d 3,50,000
Dec.31 Balance c/d 3,50,000
3,50,000 3,50,000
2017 2017
Jan.01 Balance b/d 3,50,000 Oct.01 Provision for Depreciation 1,18,125
Oct.01 Bank 4,00,000 Oct.01 Bank 1,50,000
Oct.01 Profit and Loss 81,875
Dec.31 Balance c/d 4,00,000
7,50,000 7,50,000

 

Provision for Depreciation Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
2015 2015
Dec.31 Balance c/d 26,250 Dec.31 Depreciation 26,250
26,250 26,250
2016 2016
Dec.31 Balance b/d 78,750 Jan.01 Balance c/d 26,250
Dec.31 Depreciation 52,500
78,750 78,750
2017 2017
Oct.01 Plant 1,18,125 Jan.01 Balance b/d 78,750
Dec.31 Balance c/d 15,000 Oct.01 Depreciation (i) (9 months) 39,375
Dec.31 Depreciation (ii) (3 months) 15,000
1,33,125 1,33,125

The loss on sale of the plant is ₹ 81,875, and the balance of the machine account is ₹. 4,00,000.

Question 9. Define provision. What are the examples of provision?

Answer 9: The expenses or losses associated with the current accounting period that have not yet been incurred and whose amount cannot be determined accurately are recorded in the provision. Some examples are as follows:

  • Provision for depreciation
  • Provision for taxation
  • Provision for doubtful and bad debt
  • Provision for a discount for debtors
  • Provision for repair and renewal

Question 10. Distinguish between “provision” and “reserve”.

Answer 10: The differences between provision and reserve are as follows:

Basis of Difference Provision Reserve
Meaning Businesses create provisions to meet a known liability. Companies make reserves to meet the unknown liability, i.e. strengthen the financial position of the firm.
Nature Provision is a charge against profit. Reserves are an appropriation of profits.
Purpose Provisions creation is for a known specific liability.  Businesses create reserves to strengthen their financial position.
Mode of creation The profit and loss account is debited for creating a provision. The profit and loss appropriation account is debited for creating a reserve.
Use for payment of dividends The company cannot use provisions for the payment of dividends. The company uses reserves for the payment of dividends.
Creation Provision creation is compulsory even if there is no profit. Reserve creation that depends on the management and takes place only when there are profits.

Question 11. Shri Krishnan Manufacturing Company purchased ten machines for Rs. 75,000 each on July 01 2014. On October 01 2016, a machine was destroyed by fire, and the company admitted an insurance claim of Rs. 45,000. On the same date, the company purchased another machine for Rs. 1,25,000. The company charges 15% p.a. depreciation on a written down value basis. 

It also maintains the calendar year as its financial year. Prepare the machinery account for the business from 2014 to 2017.

Answer 11: 

Books of Shri Krishna Manufacturing Company

Machinery Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
2014 2014
Jul.01 Bank 7,50,000 Dec.31 Depreciation 56,250
Dec.31 Balance c/d 6,93,750
7,50,000 7,50,000
2015 2015
Jan.01 Balance b/d 6,93,750 Dec.31 Depreciation 1,04,063
Dec.31 Balance c/d 5,89,687
6,93,750 6,93,750
2016 2016
Jan.01 Balance b/d 5,89,687 Oct.01 Depreciation (9 months 6,634
for one machine)
Oct.01 Bank 1,25,000 Oct.01 Insurance Co. 45,000
Oct.01 Profit and Loss (Loss) 7,335
Dec.31 Depreciation
(i) 79,608, (ii) 4,688 84,296
Dec.31 Balance c/d
(i) 4,51,110, (ii) 1,20,312 5,71,422
7,14,687 7,14,687
2017 2017
Jan.01 Balance b/d Dec.31 Depreciation
(i) 4,51,110, (ii) 1,20,312 5,71,422 (i) 67,667, (ii) 18,047 85,714
Dec.31 Balance c/d
(i) 3,83,443, (ii) 1,02,265 4,85,708
5,71,422 5,71,422

Working Note:

Machine costing ₹ 75,000 sold on Oct.01, 2016

Opening Balance – Depreciation = Closing Balance
Jul.01, 2014 75,000 – 5,625

(6 months)

 = 69,375
Jan.01, 2015 69,375 – 10,406 = 58,969
Jan.01, 2016 58,969 – 6,634

(9 months)

 = 52,335

 

Value on Oct.01, 2016 52,335
Insurance Claim – 45,000
Loss ₹ 7,335

Question 12. Saraswati Ltd. purchased machinery costing Rs. 10,00,000 on January 01, 2011. The company purchased a new piece of machinery on May 01 2012, for Rs. 15,00,000 and another on July 01, 2014, for Rs. 12,00,000. Part of the machinery, which originally cost Rs. 2,00,000 in 2011, was sold for Rs. 75,000 on October 31 2014. Prepare the machinery account, provision for depreciation account and machinery disposal account from 2011 to 2015 if depreciation is charged at 10% p.a. on original cost and the account is closed on December 31, every year.

Answer 12: 

Books of Saraswati Ltd. Machinery Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
2011 2011
Jan.01 Bank (i) 10,00,000
(8,00,000 + 2,00,000) Dec.31 Balance c/d 10,00,000
10,00,000 10,00,000
2012 2012
Jan.01 Balance b/d 10,00,000 Dec.31 Balance c/d 25,00,000
May.01 Bank (ii) 15,00,000
25,00,000 25,00,000
2013 2013
Jan.01 Balance b/d 25,00,000 Dec.31 Balance c/d 25,00,000
25,00,000 25,00,000
2014 2014
Jan.01 Balance b/d 25,00,000 Oct.31 Machinery Disposal 2,00,000
Jul.01 Bank (ii) 12,00,000 Dec.31 Balance c/d
(i) 8,00,000 (ii) 15,00,000
(iii) 12,00,000 35,00,000
37,00,000 37,00,000
2015 2015
Jan.01 Balance c/d 35,00,000 Dec.31 Balance c/d 35,00,000
35,00,000 35,00,000

 

Provision for Depreciation Account
Dr. Cr.
Date Particulars J.F. Amount ₹ Date Particulars J.F. Amount 

₹
2011 2011
Dec.31 Balance c/d 1,00,000
Dec.31 Depreciation (i) 1,00,000
1,00,000 1,00,000
2012 2012
Dec.31 Balance c/d 3,00,000 Jan.01 Balance c/d 1,00,000
Dec.31 Depreciation
(i) 1,00,000 (ii) 1,00,000 2,00,000
(8 months)
3,00,000 3,00,000
2013 2013
Dec.31 Balance b/d 5,50,000 Jan.01 Balance c/d 3,00,000
Dec.31 Depreciation 2,50,000
5,50,000 (i) 1,00,000 (ii) 1,50,000, 5,50,000
2014 2014
Oct.31 Machinery Disposal 76,667 Jan.01 Balance b/d 5,50,000
Dec.31 Balance c/d 7,80,000 Oct.31 Depreciation 16,667
Dec.31 Depreciation
(i) 80,000, (ii) 1,50,000,
(iii) 60,000 2,90,000
8,56,667 8,56,667
2015 2015
Dec.31 Balance c/d 11,30,000 Jan.01 Balance c/d 7,80,000
Dec.31 Depreciation
(i) 80,000, (ii) 1,50,000,
(iii) 1,20,000 3,50,000
11,30,000 11,30,000

 

Machinery Disposal Account
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
2014 2014
Oct.31 Machinery 2,00,000 Oct.31 Depreciation 76,667
Oct.31 Bank 75,000
Oct.31 Profit and Loss (Loss) 48,333
2,00,000 2,00,000

Benefits of Solving Depreciation Important Questions for Class 11 Accountancy 

Chapter 7 of Depreciation, Provisions and Reserves is an essential chapter for students for Class 11 Accountancy. It includes crucial base information about the concepts of depreciation, provisions and reserves and the purpose of why businesses create them. Therefore, students must be thorough with the chapter’s concepts and practice the numerical questions regularly, for which they can rely on depreciation class 11 important questions with answers.

Here are a few benefits that students might get by solving Important Questions Class 11 Accountancy Chapter 7:

  • By practising the Accountancy Class 11 Chapter 7 Important Questions, students can better prepare for exams because subject experts write the solutions to the questions in a step-by-step approach, which can help the students understand the material more easily.
  • The questions are created keeping in mind the latest CBSE guidelines and syllabus.
  • As the questions are drawn from every section of chapter 7, practising from the depreciation class 11 important questions will assist you in revising the entire chapter.

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Q.1 A machinery is purchased for 1,60,000 and it is estimated that after its estimated useful life of 4 years, its scrap would be 10,000. It is decided to depreciate the machine by the written down value method. Find out the percentage rate of depreciation p.a.

A. 50%

B. 45%

C. 55%

D. None of the above

Marks:1
Ans

50%

Q.2 An asset was purchased for 5, 00,000 and as per the reducing balance method, 20% deprecation is charged each year. Calculate the value of the asset after 3 years

A.  2,56,000

B. 3,50,000

C. 3,20,000

D. <s
Marks:1
Ans

2,56,000

Q.3 On Jan 01,2018 Jain & Sons purchased a second hand plant costing 2,00,000 and spent 10,000 on its overhauling. It also spent 50,000 on transportation and installation of the plant. It was decided to provide for depreciation @ 20% on written down value. The plant was destroyed by fire on July 31,2021 and an insurance claim of 5,000 was admitted by the insurance company. Prepare plant account, accumulated depreciation account and plant disposal account assuming that the company closes its books on December 31, every year.

Marks:6
Ans

Dr. Books of Jain & Sons

Machinery Account

 Cr.
Date Particulars J.F. Date Particulars J.F.
2018 2018
Jan. 01 To Bank 2,15,000 Dec. 31 By Bal. c/d 2,15,000
2,15,000 2,15,000
2019 2019
Jan. 01 To Bal. b/d 2,15,000 Dec. 31 By Bal. c/d 2,15,000
2,15,000 2,15,000
2020 2020
Jan. 01 To Bal. b/d 2,15,000 Dec. 31 By Bal. c/d 2,15,000
2,15,000 2,15,000
2021 2021
Jan. 01 To Bal. b/d 2,15,000 Jul. 31 By Plant Disposal 2,15,000
2,15,000 2,15,000
Dr. Accumulated Depreciation Account Cr.
Date Particulars J.F. Date Particulars J.F.
2018 2018
Dec. 31 To Bal. c/d 43,000 Dec. 31 By Dep. 43,000
43,000 43,000
2019 2019
Dec. 31 To Bal. c/d 77,400 Jan. 01 By Bal. b/d 43,000
By Dep. 34,400
77,400 77,400
2020 2020
Dec. 31 To Bal. c/d 1,04,920 Jan. 01 By Bal. b/d 77,400
Dec. 31 By Dep. 27,520
1,04,920 1,04,920
2021 2021
Jul. 31 To Plant Disposal 1,17,763 Jan.01 By Bal. b/d 1,04,920
Jul. 31 By Dep. 12,843
1,17,763 1,17,763
Dr. Plant Disposal Account Cr.
Date Particulars J.F. Date Particulars J.F.
2021 2021
Jul. 31 To Plant 2,15,000 Jul. 31 By Accumulated Depreciation 1,17,763
By Insurance Co. 50,000
By P & L ( Loss on sale) 47,237
2,15,000 2,15,000

Working Note:

Calculation of Depreciation Amount
Original cost on 01.01.2018

(2,00,000 + 10,000 + 5,000)

 2,15,000
Dep. for the year 2018

(@20% of 2,15,000)

 43,000
1,72,000
Dep. for the year 2019

(@20% of 1,72,000)

 34,400
1,37,600
Dep. for the year 2020

(@20% of 1,37,600)

 27,520
1,10,080
Dep. for the year 2021

(@20% of 1,10,080)

 12,843
97,237
Insurance Claim 50,000
Loss on Disposal 47,237

Q.4 Roy purchased a machinery by cheque for 2,00,000 plus IGST @ 12% on 1st October, 2018. Another machine was purchased for 1,20,000 plus IGST @ 12% by cheque on 1st April, 2020. Depreciation is charged @ 10% p.a. by the straight line method. Accounts are closed every year on 31st march. You are required to pass necessary Journal entries for the years ended 31st March, 2018, 2019 and 2020 and show Machinery Account and Machinery in the Balance Sheet:
(i) When Provision for Depreciation Account is not maintained.
(ii) When Provision for Depreciation Account is maintained.

Marks:12
Ans

(i) When Provision for Depreciation Account is not maintained.

In the Books of Roy

JOURNAL
Date Particulars L.F. Dr.() Cr.()
2018 Machinery A/c Dr. 2,00,000
Oct. Input IGST A/c Dr. 24,000
1 To Bank A/c 2,24,000
(Being the inter-state purchase of machinery, paid IGST @ 12%)
2019 Depreciation A/c (2,00,000 x 10/100 x 6/12) Dr. 10,000
March To Machinery A/c 10,000
31 (Being the depreciation charged on machinery for six months)
March Profit and Loss a/c Dr. 10,000
31 To Depreciation A/c 10,000
(Being the depreciation transferred to Profit and Loss Account)
2019 Depreciation A/c Dr. 20,000
March To Machinery A/c 20,000
31 (Being the depreciation charged to machinery for one year)
March Profit and Loss A/c Dr. 20,000
31 To Depreciation A/c 20,000
(Being the depreciation transferred to Profit and Loss Account)
April Machinery A/c Dr. 1,20,000
1 Input IGST A/c Dr. 14,400
To Bank A/c 1,34,400
(Being the inter-state purchase of machinery, paid IGST @ 12%)
2020 Depreciation A/c (20,000 + 12,000) Dr. 32,000
March To Machinery A/c 32,000
31 (Being the depreciation charged on machinery)
March Profit and Loss A/c Dr. 32,000
31 To Depreciation A/c 32,000
(Being the transfer of depreciation to Profit and Loss Account)

(ii) When Provision for Depreciation Account is maintained.

JOURNAL
Date Particulars L.F. Dr.() Cr.()
2018 Machinery A/c Dr. 2,00,000
Oct. Input IGST A/c Dr. 24,000
1 To Bank A/c 2,24,000
(Being the inter-state purchase of machinery, paid IGST @ 12%)
2019 Depreciation A/c Dr. 10,000
March To Provision for Depreciation A/c 10,000
31 (Being the depreciation charged on machinery for six months)
March Profit and Loss a/c Dr. 10,000
31 To Depreciation A/c 10,000
(Being the depreciation transferred to Profit and Loss Account)
2019 Depreciation A/c Dr. 20,000
March To Provision for Depreciation A/c 20,000
31 (Being the depreciation charged on machinery.)
March Profit and Loss A/c Dr. 20,000
31 To Depreciation A/c 20,000
(Being the depreciation transferred to Profit and Loss Account)
April Machinery A/c Dr. 1,20,000
1 Input IGST A/c Dr. 14,400
To Bank A/c 1,34,400
(Being the inter-state purchase of machinery, paid IGST @ 12%)
2020 Depreciation A/c (20,000 + 12,000) Dr. 32,000
March To Provision for Depreciation A/c 32,000
31 (Being the depreciation charged on machinery)
March Profit and Loss A/c Dr. 32,000
31 To Depreciation A/c 32,000
(Being the transfer of depreciation to Profit and Loss Account)

Q.5 On July 01, 2018, a machine was purchased for 1,00,000, On January 01, 2019 another machine was purchased for 40,000. On Jan. 01 2020 the first machine was sold for 80,000 and the same date another was purchased for 1,20,000. On July 01, 2021 a new machine was purchased for 75,000 to meet the increasing demand. Depreciation is charged 20% p.a. on a diminishing balance method.
Prepare machinery account from 2018 to 2021. Firm closes its books on Dec 31 every year.

Marks:5
Ans

Dr. Machinery account Cr.
Date Particulars J.F Amount Date Particulars J.F Amount
2018 2018
Jul 01 Bank 1,00,000 Dec 31 Depreciation 10,000
Dec 31 Balance c/d 90,000
1,00,000 1,00,000
2019 2019
Jan 01 Balance b/d 90,000 Dec 31 Depreciation 26,000
Jan 01 Bank 40,000 1. 18,000
2. 8,000
Dec 31 Balance c/d
1. 72,000
2. 32,000 1,04,000
1,30,000 1,30,000
2020 2020
Jan 01 Balance b/d 1,04,000 Jan 01 Bank 80,000
Jan 01 Profit and loss (Profit) 8,000 Dec 31 Depreciation 30,400
Jan 01 Bank 1,20,000 1. 6,400

2. 24,000
Dec 31 Balance c/d 1,21,600
1. 25,600

2. 96,000
2,32,000 2,32,000
2021 2021
Jan 01 Balance b/d 1,21,600 Dec 31 Depreciation 31,820
Jul 01 Bank 75,000 Dec 31 Balance c/d 1,64,780
1,96,600 1,96,600

Working note:

Opening balance Depreciation Closing balance
Jul 01, 2018 1,00,000 (10,000) 6 month 90,000
Jan 01,2019 90,000 (18,000) 72,000
Jan 01, 2020 72,000 72,000

Value of machinery on Jan 01, 2020 72,000

Sale of machinery 80,00

Profit on sale 8,000

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CBSE Class 11 Accountancy Important Questions

Chapter 1 - Introduction to Accounting

Chapter 2 - Theory Base of Accounting

Chapter 3 - Recording of Transactions– 1

Chapter 4 - Recording of Transactions II (Financial Accounting – I)

Chapter 5 - Bank Reconciliation Statement

Chapter 6 - Trial Balance and Rectification of Errors

Chapter 8 - Bill of Exchange

Chapter 9 - Financial Statements – 1

Chapter 10 - Financial Statements 2

Chapter 11 - Accounts from Incomplete Records

Chapter 12 - Applications of Computers in Accounting

Chapter 13 - Computerised Accounting System

FAQs (Frequently Asked Questions)

1. What topics does Chapter 7 of Accountancy Class 11 include?

 Class 11 Accountancy Chapter 7 includes the following crucial topics:

  • Depreciation, Meaning and Features of Depreciation 
  • Depletion, Amortisation, and Obsolescence
  • Causes of depreciation
  • Cost of asset
  • Depreciable cost
  • Methods of calculating depreciation amount (Straight Line Method, Written Down Value Method, Annual Charge or Depreciation)
  • Provision, Accounting Treatment for provision
  • Reserves, Types of Reserves 
  • Difference between Reserves and Provisions

 

2. What is an excellent way to revise the accountancy paper?

 For a complete and fruitful revision of the accountancy paper, firstly, students can revise the core concepts from NCERT books, post which they can also refer to CBSE sample papers, past years’ question papers, etc., to practice more questions. Students can refer to Class 11 Accountancy Chapter 7 Important Questions to make the most of their study sessions.