Theory Base of Accounting | Class 11 Accountancy Notes
By ConceptScroll Team · Published on 17 July 2026 · 2 min read
Theory Base of Accounting – this guide gives you a concise, exam-ready overview of Theory Base of Accounting from Class 11 Accountancy, written by ConceptScroll editors and reviewed against the latest NCERT textbook.
Accounting Equation
The accounting equation is the fundamental equation that forms the basis of double-entry bookkeeping. It states that Assets = Liabilities + Capital. This equation represents the relationship between what the business owns (assets) and the sources of those assets, which are either liabilities owed to outsiders or capital invested by the owner. The equation ensures that the balance sheet remains balanced, reflecting the dual aspect of every transaction. Assets are resources controlled by the business expected to bring future economic benefits. Liabilities are obligations payable to outsiders, and capital represents the owner’s claim on the business assets after deducting liabilities. Every financial transaction affects at least two accounts in such a way that the accounting equation always stays in balance. This equation is the foundation for recording transactions and preparing financial statements.
📊 Diagram: See formula_1: Assets = Liabilities + Capital
🧪 Activity: No specific activity in this section.
🔗 Connection: This section sets the stage for understanding the types of accounts and their rules, which are based on the accounting equation and the double-entry system.
Frequently asked questions
Depreciation arises due to
Normal wear and tear of an asset
When ‘ Provision for depreciation A/c’ is created, the amount of depreciation is
Dr. to ‘Provision for Depreciation’
Amortisation means
Writing off intangible assets
Depreciation is calculated from the date of
Asset put on use
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Clear NCERT-aligned notes on वित्तीय विवरण - 2 for Class 11 Accountancy.
- वित्तीय विवरण - 2 | Class 11 Accountancy Notes
Clear NCERT-aligned notes on वित्तीय विवरण - 2 for Class 11 Accountancy.