Let’s get the depreciation party started! 🕺💃 In NCERT Solutions for Class 11 Accountancy Chapter 7, students explore the concept of Depreciation, and how provisions and reserves help businesses prepare for the future. You might not think depreciation sounds exciting, but trust us, it’s like the hidden superhero of accounting. When things get old, depreciation steps in, saving your balance sheet from disasters!
What is Depreciation?
First things first—what exactly is depreciation? It’s like that moment when your shiny new phone starts losing value as soon as you take it out of the box. Depreciation is the reduction in the value of an asset over time due to factors like wear and tear, age, or obsolescence. It’s a necessary evil because no asset stays new forever (sad but true).
Methods of Depreciation
There are several ways to calculate depreciation, and each method serves a different purpose. The Straight Line Method (SLM) is simple and popular, where an asset depreciates by the same amount every year. On the other hand, the Reducing Balance Method (RBM) sees higher depreciation in the earlier years, making it the “fast lane” option. Both methods help businesses account for the asset’s diminishing value over time.
Provisions & Reserves
Provisions and reserves are like your accounting emergency fund! Provisions help you prepare for future liabilities, while reserves are set aside for specific purposes, like expansion or tackling unforeseen expenses. So, if your business faces some unexpected hurdles, you’re covered!
NCERT Solutions for Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves
NCERT Solutions for Class 11 Accountancy Chapters
- NCERT Solutions for Class 11 Accountancy Chapter 1: Introduction to Accounting 🎉
- NCERT Solutions for Class 11 Accountancy Chapter 2: Theory Base of Accounting 🏆
- NCERT Solutions for Class 11 Accountancy Chapter 3: Recording of Transactions – I 📝
- NCERT Solutions for Class 11 Accountancy Chapter 4: Recording of Transactions – II 🔄
- NCERT Solutions for Class 11 Accountancy Chapter 5: Bank Reconciliation Statement 🧩
- NCERT Solutions for Class 11 Accountancy Chapter 6: Trial Balance and Rectification of Errors 😅
- NCERT Solutions for Class 11 Accountancy Chapter 7: Depreciation, Provisions, and Reserves 💡
- NCERT Solutions for Class 11 Accountancy Chapter 8: Bills of Exchange 📃
- NCERT Solutions for Class 11 Accountancy Chapter 9: Financial Statements – 1 📊
- NCERT Solutions for Class 11 Accountancy Chapter 10: Financial Statements – 2 📈
