Use of Spreadsheet in Business Applications
Class 12 · Accountancy
3 ideas in Class 12 Accountancy, explained in plain words, with games and quizzes to practise.
Asset Register and Depreciation Basics
Part of: Assets on sheet
An asset register lists each asset with its cost, life, salvage worth and wear so far, feeding automatic depreciation. Depreciation spreads cost less salvage over useful life, since machines serve many years. For example, cost of 500000 less salvage of 50000 over 10 years charges 45000 yearly.
Why it matters. Without spreading, one year's profit carries every machine's cost while later years ride free. Registers and formulas keep the charge steady and auditable.
Formulas
- Total wear = Acquisition cost - Salvage value
- Yearly wear = Total wear / Life in years
- Book value = Cost - Wear so far
Key words
- Asset register
- : List of assets with details.
- Depreciation
- : Yearly slice of asset cost.
- Salvage value
- : Scrap worth at life end.
- Book value
- : Cost less wear so far.
Try it in two minutes
- List a mixer with cost, life and scrap worth on a card.
- Subtract scrap from cost and divide by life. Ask: what is yearly wear?
- Track wear-so-far beside cost. Ask: what is book value now?
Try at home. Cost 200000, salvage 20000, life 9 years. Find yearly straight-line wear.
Depreciation Methods on Sheet
Part of: Assets on sheet
Straight-line charges the same slice yearly, while written-down charges a fixed percent of the shrinking book value, so early years bear more. For example, 10 percent on 200000 charges 20000 first, then 10 percent on 180000 charges 18000, piling 38000 in two years.
Why it matters. Matching wear to use keeps profit fair. Heavy early use suits falling charges; steady use suits equal slices.
Formulas
- Straight line wear stays equal yearly
- Written down wear = Rate x Book value
- Book value falls faster early under written down
Key words
- Straight line
- : Equal yearly wear.
- Written down
- : Percent of shrinking value.
- Rate
- : Fixed percent charged.
- Accumulated wear
- : Piled wear so far.
Try it in two minutes
- Charge 10 percent on 200000. Ask: what is year 1?
- Cut book value to 180000 and charge again. Ask: what is year 2?
- Pile both years. Ask: what is accumulated wear?
Try at home. Book value 100000, rate 10 percent written down. Find year 1 and year 2 wear.
Loan Repayment Schedule
Part of: Loans on sheet
A loan schedule fixes equal instalments, each split into interest on the reducing balance and the rest as principal. Interest shrinks as the balance falls, so principal grows inside later instalments. For example, a 600000 loan at 12 percent with a 200000 instalment pays 72000 of interest and 128000 of principal in year 1.
Why it matters. Flat interest guesses overcharge later years and hide true cost. Schedules show exactly when the debt dies.
Formulas
- Instalment = Interest + Principal
- Interest = Rate x Balance due
- Principal grows as balance shrinks
Key words
- Instalment
- : Fixed yearly repayment.
- Reducing balance
- : Loan left after payments.
- Principal
- : Loan part of instalment.
- Schedule
- : Year-wise split table.
Try it in two minutes
- Charge 12 percent on 600000. Ask: what is year 1 interest?
- Cut 200000 instalment into 72000 interest and the rest. Ask: what is principal?
- Cut the balance and charge again. Ask: why did interest fall?
Try at home. Loan 300000 at 10 percent, instalment 100000. Find year 1 interest and principal.
What your child will practise
- Asset Register and Depreciation Basics: Candy Puzzle (Clue Puzzle)
- Asset Register and Depreciation Basics: Candy Quick Fire (Quick Fire)
- Asset Register and Depreciation Basics: Desert Quest (Flip and Match)
- Depreciation Methods on Sheet: Desert Puzzle (Clue Puzzle)
- Loan Repayment Schedule: Space Quick Fire (Quick Fire)
- Quiz: Asset Register and Depreciation Basics (8 questions)
- Quiz: Depreciation Methods on Sheet (8 questions)
- Quiz: Loan Repayment Schedule (8 questions)