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Depreciation, Provisions, and Reserves Class 11 Notes CBSE Accountancy Chapter 7

Revision Notes

Revision Notes for CBSE Class 11 Accountancy Chapter 7 - Free PDF Download

Depreciation, Provisions, and Reserves Class 11 Notes CBSE Accountancy Chapter 7 are present in this article in the form of a free-to-download pdf. These notes are basically prepared for the purpose of Chapter 7 Accountancy revision for Class 11.

Students can refer to these notes for a better understanding of the whole chapter. These notes will help students get ready for their examinations. Students are advised to download the free pdf and enjoy free learning. Apart from this, let us know what the topics are present in this chapter, and what other benefits can be rendered from this study resource will be discussed in detail in this article.

Depreciation, Provisions, and Reserves Class 11 Accountancy Chapter 7 - Topics Covered

Students looking for revision notes of Chapter 7 Depreciation, Provisions & Reserves of CBSE Class 11 Accountancy must know the topics covered in this chapter according to the latest syllabus prescribed by the CBSE Board. This chapter is divided into two sections, which contain the following topics:

SECTION – I

Depreciation

Meaning of Depreciation
Features of Depreciation

Depreciation and other Similar Terms

Depletion
Amortisation

Causes of Depreciation

Wear and Tear due to Use or Passage of Time
Expiration of Legal Rights
Obsolescence
Abnormal Factors

Need for Depreciation

Matching of Costs and Revenue
Consideration of Tax
True and Fair Financial Position
Compliance with Law

Factors Affecting the Amount of Depreciation

Cost of Asset
Estimated Net Residual Value
Depreciable Cost
Estimated Useful Life

Methods of Calculating Depreciation Amount

Straight Line Method (Advantages and Limitations)
Written Down Value Method (Advantages and Limitations)

Straight Line Method and Written Down Method: A Comparative Analysis

Basis of Charging Depreciation
Annual Charge of Depreciation
Total Charge Against Profit and Loss Account on Account of Depreciation and Repair Expenses
Recognition by Income Tax Law
Suitability

Methods of Recording Depreciation

Charging Depreciation to Asset account
Creating Provision for Depreciation Account/Accumulated Depreciation Account

Disposal of Asset

Use of Asset Disposal Account

Effect of any Addition or Extension to the Existing Asset

SECTION – II Provisions and Reserve

Provisions

Accounting Treatment for Provisions

Reserves

Difference between Reserve and Provision
Types of Reserves
Difference between Revenue and Capital Reserve
Importance of Reserves

Secret Reserve

Now, among these, some of the important topics covered in Depreciation, Provisions, and Reserves are as follows:

Depreciation.
Causes of Depreciation.
Need for Depreciation.
Factors Affecting Depreciation.
Methods to calculate depreciation.
Provision and Reserves.

Last updated date: 02nd Jun 2023

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Depreciation, Provisions, and Reserves Class 11 Notes CBSE Accountancy Chapter 7 - Salients Features of the Revision Notes

Following are some of the features which students can find on the revision notes for Class 11 Accountancy Chapter 7:

These Revision Notes are a quick summary of the whole chapter - Depreciation, Provisions, and Reserves. This will facilitate those students who want a quick recapitulation on the subject or want a more straightforward explanation of the topic. Thus, these notes provide a quick on-hand solution.
These notes come in the form of a free-to-download pdf; this feature helps the students in easy access to the revision pdfs.
The notes are prepared by our subject experts, and thus they are quite reliable.
All the topics are covered in these Depreciation, Provisions, and Reserves Class 11 Notes CBSE Accountancy Chapter 7. The topics are explained in a lucid manner, and thus the students can easily understand the topics while they revise.
The notes are presented in a manner that is comfortable for the students to study right before their exam.

Depreciation, Provisions, and Reserves Class 11 Notes CBSE Accountancy Chapter 7 - Benefits of Referring to the Notes

So, how do these notes help a student of Class 11 to study their Accountancy subject? Check out the following benefits of referring to the Class 11 Notes CBSE Accountancy Chapter 7:

When preparing for any examination or any class test, students need to have with them a set of notes that they can refer to while studying. Having notes greatly simplifies the studying process. It gives students a better understanding of the subject and builds concepts thoroughly. Depreciation Class 11 Notes have greatly made the life of students more comfortable.
Provision and Reserve Class 11 Notes by Vedantu aim to explain concepts better and try to create in the mind of students a love for the subject. They also give a lot of examples that students can refer to while studying, which makes the process of preparation easy.
Accountancy Class 11 Chapter 7 NCERT Solutions can be downloaded and used by students at any time, free of cost. It will be an asset to any student that utilizes it.
You can make use of Provision and Reserve Class 11 Notes while preparing for the upcoming exams. They will save you a lot of time and clear conceptual errors in an instant.
Depreciation, Provisions and Reserves Class 11 can become an easy-to-understand chapter with the help of Vedantu’s revision notes.

Depreciation, Provisions, and Reserves Class 11 Notes CBSE Accountancy Chapter 7 - How are the Topics Explained?

Why should you use Vedantu’s revision manual? The answer is simple. It is easy, clear and written in a style that any student can understand on his or her own.

Depreciation Class 11 Notes —Depreciation

The notes open with a brief, to-the-point discussion on what is depreciation and what are its features, causes, needs or objectives.

Depreciation Class 11 Notes—Methods of Calculating Depreciation

Then, the discussion moves on to methods of calculating depreciation. The two methods for calculating depreciation are a straight-line method and a written-down value method. Both these methods are explained with the use of detailed examples.

Depreciation Class 11 Notes—Provisions and Reserves

These notes also discuss the definitions of what is provision and reserve. The two concepts are dealt with a lucid touch that clearly explains the details of either topic. There are two types of reserves, and the difference between the two is elaborated. Also, the difference between revenue reserve and capital reserve is discussed.

Depreciation, Provisions, and Reserves Class 11 CBSE Accountancy Chapter 7 - Extra Questions to Practice

Check out the following questions:

Name the depreciation method which is approved by the tax authorities.
Which depreciation system tells that the asset must be depreciated more in the earlier years than in the later period?
What are the different types of reserves?

(Hint: Q.1 and Q.2 - WDV Q. 3 - Revenue and Capital Reserves)

Conclusion

Students looking for NCERT Solutions in this chapter can visit our website. Also, they can find the revision notes and NCERT solutions of all the chapters on our website. Students can download all the required study material in PDF format to study from anywhere and anytime.

FAQs on Depreciation, Provisions, and Reserves Class 11 Notes CBSE Accountancy Chapter 7

1. What is depreciation?

Depreciation is a process by which the value of goods and fixed assets decrease over time. It is an accounting method whereby the asset’s value is reduced over time. There are plenty of reasons why depreciation takes place. Wear and tear of goods, expiration of the legal rights and obsolesces of the goods contribute to the depreciation of fixed assets. We need to understand what is depreciation so that we can calculate the actual profit or tax. For a better grounding in the subject, refer to class 11 depreciation notes.

2. What is meant by provisions?

A provision in accounting is a term that is used to describe the method of laying aside some money for any unforeseen liabilities. Since this amount cannot be determined beforehand, a rough assumption is made. If students still have difficulty understanding the topic, they can use provisions and reserve class 11 notes.

3. What is the meaning of reserves?

Reserves set an amount of money aside from the profits encountered in business to strengthen the company. These reserves can be set out under general reserve, specific and secret reserve. The concept is very easy to grasp and does not require much study. To better understand the nuances of the chapter, consider using provision and reserve notes in class 11.

4. Is depreciation a provision or reserve according to Chapter 7 of Class 11 Accountancy?

Accumulated depreciation expenditures are referred to as provisions for depreciation. The process through which the value of commodities and fixed assets decreases over time is known as depreciation. It is a technique of accounting in which the asset's value is lowered over time. Depreciation is a non-cash expenditure that decreases the company's net profits and is recorded on the income statement. Provision for bad debts is a liability, not a reserve, for the firm.

5. Is Chapter 7 of Class 11 Accountancy easy?

For students who enjoy Accountancy, this is an easy chapter. However, for some, it may be a tad bit difficult and even sometimes confusing. Therefore, you can refer to NCERT Solutions by Vedantu, which is available free of cost. These solutions can be downloaded in a PDF format too. The best part is that these solutions are designed by subject matter experts with vast experience and a thorough understanding of the CBSE curriculum.

6. What are the causes of depreciation according to Chapter 7 of Class 11 Accountancy?

Time, obsolescence, a permanent drop in market worth, and weather and accidental factors are all external sources of depreciation. Internal causes arise from the action of any natural or intrinsic cause in the asset. Internal assets depreciate due to wear and tear, fatigue, depletion, degradation, and other factors. Wear and tear include capital assets such as plants, machinery, and buildings that lose value over time due to continual usage. These variables have nothing to do with the asset.

7. What does Chapter 7 of Class 11 Accountancy brief us about?

Depreciation, provisions, and reserves are discussed in detail in Vedantu’s revision notes of Chapter 7. These notes will assist students in understanding this topic better and preparing for their exams. This chapter is about the decline of asset value over time and the characteristics of such declines. Students can refer to depreciation provisions and reserves solutions in addition to the notes to obtain a better knowledge and perspective on the subject. Use Vedantu's Class 11 Chapter 7 revision notes to have a better grasp of the entire topic.

8. From where can I download solutions of Chapter 7 of Class 11 Accountancy for free?

If you are looking for Accountancy solutions for free, you can visit the official Vedantu website. Right from revision notes to master classes, Vedantu offers it all. You can also get your doubts cleared by teachers online to ensure that your studies never stop. At Vedantu, you can also download all the solutions in a PDF format to ensure there are no breaks in your studies.