Please refer to Depreciation Provisions and Reserves HOTs Class 11 Accountancy provided below with Depreciation Provisions and Reserves. All HOTs for Class 11 Accountancy with answers provided below have been designed as per the latest syllabus and examination petter issued by CBSE, NCERT, KVS. Students of Standard 11 Accountancy should learn the solved HOTS for Class 11 Accountancy provided below to gain better marks in examinations.
Depreciation Provisions and Reserves Class 11 Accountancy HOTs
Question. Define Depriciation.
Answer : Depreciation is defined as continuing or permanent decrease in the quantity, value, and quality of assets.
Question. Give two objectives of Depreciation
Answer : The two objectives of depreciation are
• For ascertaining the true profit and loss by profit and loss account
• For showing the true financial position by the balance sheet
Question. What is the scrap value or residual of an asset?
Answer : The scrap value or residual of an asset is the estimated sale value of the assets at the end of its useful life.
Question. Define Provisions.
Answer : The amount retained by way of providing for any unknown liability of which the amount cannot be detained with substantial accuracy.
Question. Define Reserve
Answer : Reserve refers to the amount set apart out of profit and other surpluses to meet future risks.
Question. Give one difference between reserve and provision on the basis of charge or appropriation
Answer : Reserve is an appropriation of profit and provision is a charge against profit.
Question. General reserve can be used only for some specific purposes. Is it true or false
Answer : False
Question. Depreciation is non-cash expenditure
Answer : True