NCERT Solutions For Class 11 Financial Accounting – Depreciation, Provisions and Reserves
NCERT Solutions For Class 11 Financial Accounting – Depreciation, Provisions and Reserves Short Answer Type Questions Q1. What is ‘Depreciation’? Solution: Depreciation means fall in book value of depreciable fixed asset because of wear and tear of the asset passage/efflux of time obsolescence accident A machinery costing ₹ 1,00,000 and its useful life is 10 years; so, depreciation is calculated as: Annual Depreciation per annum = Cost of Asset-Estimated Scrap Value/Expected or Estimated life of Asset = 100000/10 = ₹ 10,000 Q2. State briefly the need for providing depreciation. Solution: The needs for providing depreciation are given below. To ascertain the correct profit or loss: Correct profit or loss can be ascertained when all the expenses and losses incurred for earning revenues are charged to Profit and Loss Account. Assets are used for earning revenues and its cost is charged in form of depreciation from Profit and Loss Account. To show true and fair view of financial statements...