Depreciation Accounting: Concepts, Causes, and Methods of Depreciation — Commerce Lecture Notes

1. Syllabus Overview & Exam Focus

In the official teacher recruitment and competitive syllabus, Depreciation Accounting: Concepts, Causes, and Methods of Depreciation is a core examination unit of Accounting. Questions test definitions, accounting/management principles, legal provisions, formulas, and real-world commercial applications.

2. Key Concepts & Essential Principles

Key exam concepts and principles for Depreciation Accounting: Concepts, Causes, and Methods of Depreciation:

Meaning, Need & Causes of Depreciation: Gradual, permanent decrease in book value of fixed tangible assets due to wear and tear, obsolescence, passage of time, or depletion. Straight Line Method (SLM / Fixed Instalment): Equal amount written off each year: (Cost - Scrap Value) / Life. Simplest method, suitable for assets with minimal maintenance changes. Written Down Value Method (WDV / Reducing Balance): Fixed percentage applied on diminishing opening balance. Recognised by Indian Income Tax Act; matches increasing repairs with decreasing depreciation. Other Methods & Disposal Accounting: Annuity method, Sinking Fund method, Insurance policy method, Revaluation method, and Machine Hour Rate method. Recording asset sales and profit/loss on disposal.

3. Self-Assessment & Study Checklist

Use this interactive checklist to verify your exam preparation status for this topic:

Read theoretical notes & conceptual summary Memorized essential definitions, formulas & accounting entries Solved minimum 20 previous years' questions (PYQ) Attempted timed self-assessment test Marked complete on main syllabus tracker