Lesson Notes By Weeks and Term - Senior Secondary 1

Depreciation account

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Term: 3rd Term

Week: 7

Class: Senior Secondary School 1

Age: 15 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Financial accounting

Topic:-       Depreciation account

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Define depreciation
  2. List examples of depreciable assets
  3. State reasons for charging depreciation
  4. Mention characteristics of depreciable assets.

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on exercises on creditors control account

Students pay attention

STEP 2

EXPLANATION

She defines depreciation and gives examples of depreciable assets

 

Students pay attention and participates

STEP 3

DEMONSTRATION

She states and explains the reasons for charging depreciation and mentions the characteristics of depreciable assets

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

DEPRECIATION ACCOUNT
Depreciation can be defined as the reduction in the value of tangible(fixed) assets.

 

EXAMPLES OF DEPRECIABLE ASSETS

The following are examples of assets associated with depreciation;

  1. Buildings
  2. Motor vehicles
  3. Plant and machinery
  4. Office equipment
  5. Furniture
  6. Fixtures and fittings, etc.

 

EXAMPLES OF DEPRECIABLE ASSETS

The following are examples of assets associated with depreciation;

 

  1. Buildings
  2. Motor vehicles
  3. Plant and machinery
  4. Office equipment
  5. Furniture
  6. Fixtures and fittings, etc.

 

REASONS FOR CHARGING DEPRECIATION

The following are reasons for charging depreciation;

  1. To help the firm spread the cost of the asset over its useful life.
  2. It helps to determine a realistic value of an asset at its disposal.
  3. It helps in the determination of a fair profit.

 

CHARACTERISTICS OF A DEPRECIABLE ASSET

  1. Acquired primarily for use in production of goods and services.
  2. It must have a useful life of over one year.
  3. It is not intended for sale in ordinary course of the business.

 

CAUSES OF DEPRECIATION

  1. Wear and Tear: continuous usage of an asset will lead to wear and tear of the asset. Erosion, rust, decay, chemical reaction, will lead to wear and tear and also result in decrease in value of tangible assets.
  2. Effluxion / passage of time: the value of asset decreases/ goes down whether utilized or not. With the passage of time, effective life of assets keeps decreasing. Passage of time can also affect leaseholds, copyrights and patent rights. Such assets have a certain legal life.
  3. Obsolescence: an asset can become obsolete due to new inventions and loss of demand due to change in technology. Example; the replacement of typewriter by computer.
  4. Depletion: wasting assets decrease in value as a result of continuous usage. Assets such as coal, mines, oil wells, forest, etc.

EVALUATION :   1. What is depreciation?

  1. Mention four examples of depreciable assets.
  2. Mention three reasons for charging depreciation.
  3. Mention two features of a depreciable asset.
  4. Mention three causes of depreciation.

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively