Topics
Introduction to Book-Keeping and Accountancy
- Accounting
- Book-Keeping
- Accountancy
- Book-Keeping vs. Accountancy
- Basis (Methods) of Accounting System
- Qualitative Characteristics of Accounting Information
- Basic Terms in Accounting
- Transaction
- Capital and Drawings
- Debtors, Creditors and Bad Debts
- Expenditure and Its Types
- Discount and Its Types
- Solvent Person vs. Insolvent Person
- Accounting Year
- Trading Concerns vs. Not for Profit Concerns
- Concept of Goodwill
- Fundamentals of Business Earnings
- Concepts of Assets, Liabilities and Net Worth
- Accounting Principles
- Accounting Concepts
- Core Accounting Concepts
- Accounting Standards
Meaning and Fundamentals of Double Entry Book-Keeping
Journal
- Accounting Documents
- Goods and Service Tax(GST)
- Types of Accounting Documents
- Voucher
- Tax Invoice (Under GST)
- Credit Memo
- Receipt
- Cheque
- Types of Cheques
- Books of Accounts
- Books of Accounts > Journal
- Journal Entries
- Journal Entries > Goods Account
- Journal Entries > Recording Discount in Journal
- Journal Entries > Other Important Journal Entries
Ledger
Subsidiary Books
- Concept of Subsidiary Books
- Cash Book
- Cash Book > Simple Cash Book (Single Column Cash Book)
- Cash Book > Two Column Cash Book (With Cash and Bank Columns)
- Cash Book > Petty Cash Book
- Simple Petty Cash Book
- Analytical Petty Cash Book
- Purchase Book
- Purchase Return Book
- Sales Book
- Sales Return Book
- Journal Proper
Bank Reconciliation Statement
- Accounting Documents Used in Banking
- Accounting Documents Used in Banking
- Pay-in-Slip
- Withdrawal Slip
- Bank Pass Book
- Bank Statement
- Bank Advice
- Concept of Virtual Banking
- Bank Reconciliation Statement(BRS)
- Cash Book vs Pass Book : Causes of Differences
- Time Difference(Regarding BRS)
- Errors and Omission Made by Bank or Businessman
- Formats of BRS
- Preparation of BRS
- Cash Book and Pass Book Comparison for Common Period
- Cash Book and Pass Book Balances for Different Periods
- Bank Balance as per Cash Book (Favourable / Debit Balance)
- Bank Balance as per Pass Book (Favourable / Credit Balance)
- Overdraft as per Cash Book (Unfavourable / Credit Balance)
- Overdraft as per Pass Book (Unfavourable/Debit balance)
- Reconciliation of Debtors and Creditors
Depreciation
Rectification of Errors
Final Accounts of a Proprietary Concern
Single Entry System
- Concept of Single Entry System
- Single Entry System vs. Double Entry System
- Parts of Single Entry System
- Statements of Affairs
- Statement of Profit or Loss
- Statement of Profit or Loss > Net Worth Method
- Practical Problems on Single Entry System
- Introduction
- Comparison of Depreciation Methods
- Suitability of Methods
Maharashtra State Board: Class 11
Introduction
- The methods of depreciation describe how and how much of an asset’s value should be reduced each year.
- Each method follows a different logic for distributing an asset’s cost across its useful life, depending on how the asset is used and wears out over time.
- Choosing the correct method ensures fairness and accuracy in financial reporting, reflecting the asset’s real usage pattern and lifespan while maintaining consistency and reliability in accounts.
Maharashtra State Board: Class 11
Comparison of Depreciation Methods
| Sr. No. | Method | Description | Key Feature |
|---|---|---|---|
| 1 | Straight Line Method (SLM) | Equal depreciation each year on original cost. | Fixed amount charged yearly. |
| 2 | Written Down Value Method (WDV) | Depreciation at a fixed rate on book value reduces each year. | Decreasing amount each year. |
| 3 | Annuity Method | Considers time value of money; | Uses a fixed annual charge, including interest. |
| 4 | Depreciation Fund (Sinking Fund) Method | A fixed amount is set aside yearly to replace the asset after its life. | Builds replacement fund through investments. |
| 5 | Revaluation Method | Depreciation based on periodic revaluation difference. | Simple for fluctuating-value assets. |
| 6 | Insurance Policy Method | Premiums paid to insurance policy for replacement of asset. | The insurance company pays the replacement cost. |
| 7 | Machine Hour Rate Method | Depreciation is charged per hour of machine use. | Based on usage instead of time. |
| 8 | Units of Production Method | Based on the asset’s output, | Variable charge based on activity. |
| 9 | Sum-of-the-Years’-Digits Method (SYD) | Accelerated method; higher depreciation in early years. | Charges decline each year, shortening payback. |
| 10 | Double Declining Balance Method (DDB) | Accelerated form of declining balance; twice the SLM rate. | Quick recovery of cost; higher early expense. |
Maharashtra State Board: Class 11
Suitability of Methods
| Method of Depreciation | Suitable For | Reason for Suitability |
|---|---|---|
| Straight Line Method (SLM) | Buildings, office furniture, patents, fixtures | Assets give equal benefits each year; depreciation is spread evenly across useful life. |
| Written Down Value Method (WDV) | Machinery, vehicles, equipment | Assets lose more value in early years; this corresponds with higher early wear and tear. |
| Annuity Method | Long-term leases, costly assets with interest element | Suitable when the asset provides steady income and the time value of money is considered. |
| Depreciation Fund or Sinking Fund Method | Ships, large plants, or assets with high replacement cost | Useful when a business wants to accumulate a fund for asset replacement after its life. |
| Revaluation Method | Livestock, loose tools, small instruments | Practical where assets’ values fluctuate frequently and exact cost is hard to track. |
| Insurance Policy Method | Assets replaced by insurance (e.g., leasehold property) | Appropriate when a business takes an insurance policy to fund future replacements. |
| Machine Hour Rate Method | Machines and production equipment | Ideal when depreciation depends on usage hours rather than time. Prevents overcharging in idle years. |
| Units of Production Method | Mines, quarries, and factories (output-based assets) | Suitable where asset wear depends on units produced instead of years used. |
| Sum-of-the-Years’-Digits (SYD) Method | Vehicles, computers, quickly obsolescent equipment | Best for assets that lose usefulness rapidly and need higher initial depreciation. |
| Double Declining Balance Method (DDB) | Electronic devices, heavy machinery | Useful for fast-depreciating assets to recover cost quickly during early productive years. |
