NCERT Solutions for Class 11 Accountancy Chapter 7 by Extramarks are a valuable learning resource for Class 11 students. These include detailed answers to all the questions given at the end of Class 11 Accountancy Chapter 7 -Depreciation, Provisions & Reserves. Students can refer to these solutions to prepare better for their exams. They can also be helpful for their last-minute revisions and can work as a guide for their assignments.
Class 11 Accountancy NCERT Solutions Chapter 7 Depreciation, Provisions & Reserves
Access NCERT Solutions for Class 11 Accountancy Chapter 7- Depreciation, Provisions and Reserves
NCERT Accountancy Class 11 Solutions
Accountancy is a very important subject that Class 11 students need to pay attention to as the concepts introduced in the subject are new to students and will be used throughout their higher education and later in their careers. Students can refer to the NCERT Accountancy Class 11 Solutions by Extramarks to get help with their preparations. The Solutions are prepared by subject matter experts who have ensured that every answer is accurate and explained in a thorough manner to students. NCERT Solutions for Class 11 Accountancy Chapter 7 will be helpful to students for their last-minute preparations and revisions as well.
Introduction to Accounting
The recording of a company’s financial operations is known as accounting. This procedure necessitates a grasp of three crucial elements. The details are as follows.
- Record-keeping system: To keep track of all transactions, one must be conversant with rules, methods, and standardized forms.
- Transaction Tracking: It’s critical to understand the kind of transactions you’re recording, such as client orders, payments, etc.
- Financial Reporting: Certain financial transactions must be handled and reported differently than others. Financial reporting entails keeping track of costs, revenues, earnings, and capital invested and developing a comprehensive understanding of the same.
The Layers of Accounting
Accounting gets divided into divisions, levels, and types. Some of the widely recognized layers are given below.
- Taxes: Taxes are crucial in a company, and every corporate organization must be well aware of them. So accounting requires keeping track of taxes that have been paid as well as those that are pending, etc.
- Payroll: Payroll is in charge of paying current employees and numerous employee-related payments such as social security and workers’ compensation.
- Accounts Payable and Receivable: A firm works smoothly when funds flow easily. Hence, the accountant must keep track of money spent at a location and funds received after-sales.
- Bookkeeping: If an accountant misses some transactions over a period, they add up to huge figures, causing the entire accounting to get ruined. Therefore it becomes important to record every transaction be it small or large.
The End Result of Accounting
After the transactions have been recorded and saved, the data must be analyzed. Records get generated whenever an investor or business owner wishes to assess his firm’s success. The most typical sorts of reports created are as follows.
- Profit and Loss Report
- Financial Position Statements
- Assets and Liabilities Report
- Retained Equity
A Brief Introduction to Depreciation
The term ‘depreciation’ refers to the cost allocated to an item in accounting over a specified period. It illustrates how much of an asset’s value has been depleted or eaten over time. Depreciation may dramatically enhance a company’s profitability if calculated correctly.
Conclusion
While these were only a few of the introduction themes of Class 11 Accountancy Chapter 7, you will find all the well-structured and well-explained answers to all the NCERT questions in Chapter 7 on Extramarks platform.
Fun Facts
The following are some of the most fascinating and thrilling fun facts about accounting:
- The 10th of November is World Accounting Day.
- In 1928, an accountant called Walter Diemer created the highly popular bubblegum.
- Bookkeeping and the phrases that may get constructed from it are the only words in the English language with three consecutive sets of repeated letters.
Solved Examples
Q.1 What precisely is an asset, and what are the asset categories?
Ans. To perform in a competitive market, a business organization must have assets that provide value to the specific corporate goal. An asset in accounting is any resource with economic value that gets owned by an individual or a group of people to reap more benefits in the future. The following are the characteristics of a valuable asset.
- The owner is the sole individual who owns and controls an asset.
- An asset may or may not become a finance tool in the future.
The asset categories are current assets, non-current assets, physical assets, intangible assets, operational assets, non-operating assets, and fake assets.
Q.2 What are the characteristics of Depreciation?
Ans. Depreciation has the following characteristics:
- The book value of fixed assets decreases due to depreciation.
- There is no financial flow involved.
- It is an expense that should get subtracted before calculating the taxable profit.