Class 11 Accountancy - Chapter Depreciation, Provisions and Reserves NCERT Solutions | Give four examples each of ‘provis

State whether the following statements are true or false:

1. Depreciation is a non-cash expense.
2. Depreciation is also charged on current assets.
3. Depreciation is decline in the market value of tangible fixed assets.
4. The main cause of depreciation is wear and tear caused by its usage.
5. Depreciation must be charged so as to ascertain true profit or loss of the business.
6. Depletion term is used in case of intangible assets.
7. Depreciation provides fund for replacement.
8. When market value of an asset is higher than book value, depreciation is not charged.
9. Depreciation is charged to reduce the value of asset to its market value.
10. If adequate maintenance expenditure is incurred, depreciation need not be charged.

State briefly the need for providing depreciation.

Give four examples each of ‘revenue reserve’ and ‘capital reserves’.

Explain the concept of depreciation. What is the need for charging depreciation and what are the causes of depreciation?

What are the effects of depreciation on profit and loss account and balance sheet?

Name and explain different types of reserves in detail.

State with reasons whether the following statements are True or False ;
(i) Making excessive provision for doubtful debits builds up the secret reserve in the business.
(ii) Capital reserves are normally created out of free or distributable profits.
(iii) Dividend equalisation reserve is an example of general reserve.
(iv) General reserve can be used only for some specific purposes.
(v) ‘Provision’ is a charge against profit.
(vi) Reserves are created to meet future expenses or losses the amount of which is not certain.
(vii) Creation of reserve reduces taxable profits of the business.

Discuss in detail the straight line method and written down value method of depreciation. Distinguish between the two and also give situations where they are useful.

Basaria Confectioner bought a cold storage plant on July 01, 2014 for ₹ 1,00,000. Compare the amount of depreciation charged for first three years using:

1. Rate of depreciation @ 10% on original cost basis;
2. Rate of depreciation @ on written down value basis;
3. Also, plot the computed amount of depreciation on a graph.

Distinguish between ‘general reserve’ and ‘specific reserve’.

Name any two types of commonly used negotiable instruments.

Why is it necessary to record the adjusting entries in the preparation of final accounts?

State the meaning of incomplete records?

Briefly state how the cash book is both journal and a ledger.

State the meaning of a trial balance?

State the four basic requirements of a database applications.

Define accounting.

State the different elements of a computer system.

Why is it necessary for accountants to assume that business entity will remain a going concern?

State the need for the preparation of bank reconciliation statement?

Match the items given under ‘A’ with the correct items under ‘B’
(i) Closing stock is credited to                                                  (a) Trial balance
(ii) Accuracy of book of account is tested by                            (b) Trading account
(iii) On returning the goods to seller, the buyer sends              (c) Credit note
(iv) The financial position is determined by                              (d) Balance sheet
(v) On receiving the returned goods from the                          (e) Debit note
buyer, the seller sends

What is meant by Grouping and Marshalling of assets and liabilities. Explain the ways in which a balance sheet may be marshalled.

A bank reconciliation statement is prepared with the balance:
  (a) Passbook                                           (b) Cash book
  (c) Both passbook and cash book           (d) None of these

A concept that a business enterprise will not be sold or liquidated in the near future is known as :
(a) Going concern
(b) Economic entity
(c) Monetary unit
(d) None of the above

The journal entry to record the sale of services on credit should include:
(a) Debit to debtors and credit to capital.
(b) Debit to cash and Credit to debtors.
(c) Debit to fees income and Credit to debtors.
(d) Debit to debtors and Credit to fees income.

What practical difficulties are encountered by a trader due to incompleteness of accounting records?

Explain the concept of cost of goods sold?

Explain how the following may be ascertained from incomplete records:
(a) Opening capital and closing capital
(b) Credit sales and credit purchases
(c) Payments to creditors and collection from debtors
(d) Closing balance of cash.

Choose the Correct Answer

During the life-time of an entity accounting produce financial statements in accordance with which basic accounting concept :
(a) Conservation
(b) Matching
(c) Accounting period
(d) None of the above

What is contra entry? How can you deal this entry while preparing double column cash book?