Accountancy Part AAccounts for Non Profit Organsiation

From the following information calculate how much amount of depreciat…

From the following information calculate how much amount of depreciation will be shown in the Income and Expenditure A/c for the year 2021-22 :

	As on 31 March, 2021	As on 31 March, 2022
Furniture	Rs. 1,80,000	Rs. 1,60,250

Furniture worth Rs. 8,000 was sold for Rs. 10,000 on 1 April, 2021.

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Rs. 11,750

Depreciation for the year is the fall in the book value of furniture that is not explained by the furniture sold.

Opening furniture = Rs. 1,80,000
Less: book value of furniture sold = Rs. 8,000
Balance before depreciation = Rs. 1,72,000
Less: closing furniture = Rs. 1,60,250
Depreciation for 2021-22 = Rs. 11,750

The Rs. 2,000 profit on sale (Rs. 10,000 − Rs. 8,000) is a separate income, not part of the depreciation.

Note: This question is from the pre-rationalised NCERT book. The topic is not there in the latest NCERT book (2026-27), but it is still in the CUET 2026 syllabus, so do not skip it.

NCERT (Pre-rationalised edition):
Income and Expenditure Account – “… The Income and Expenditure Account is prepared on accrual basis with the help of Receipts and Payments Account along with additional information regarding outstanding and prepaid expenses and depreciation etc. Hence, many items appearing in the Receipts and Payments need to be adjusted.”