Use of Spreadsheet 3 Class 12: NCERT Accountancy Chapter 3 PDF

Use of Spreadsheet 3 Class 12 is Chapter 3 of the NCERT Class 12 Accountancy textbook Computerised Accounting System, and it runs 18 printed pages (pp. 86–104). The chapter teaches three spreadsheet applications — payroll accounting, asset depreciation and loan repayment — all built with Excel functions.

The official chapter PDF is linked in the section below, and the rest of this page explains the same chapter section by section, so you can revise with the book open beside you. This page is kept for the 2026-27 session.

Download the Use of Spreadsheet 3 Class 12 NCERT Chapter PDF

Open the Use of Spreadsheet 3 Class 12 chapter PDF from NCERT to see the chapter exactly as printed — layout maps, rate tables, worked examples and the question sets on pages 101–103.

The file also carries the chapter’s learning objectives on the opening page and the answer key for the multiple choice questions on the final page. All NCERT books are published as free official PDFs on the NCERT portal.

Use of Spreadsheet 3 at a Glance: What Is Inside This Chapter

The table below is the chapter’s contents record as published in the NCERT edition — its sections, spreadsheet layouts, worked examples and question sets.

What the Chapter Teaches

The opening page sets the learning objectives: compute an employee’s gross salary, apply deductions to reach net salary, calculate depreciation by different methods, and work out loan repayment along with interest (NCERT, p. 86).

• 3.1 Payroll Accounting — pages 87–92
• 3.2 Asset Accounting — pages 93–98
• 3.3.1 Loan repayment using the PMT function — pages 99–100

Each application is taught as a template: the book first lists the elements, then shows which columns are entered directly and which are computed by formulas, then displays the finished spreadsheet. The chapter closes with multiple choice questions, short answer questions and a skill review (pp. 101–103).

Three Business Applications: Payroll, Depreciation and Loan Repayment

This section is a map of the whole chapter before any formula appears — read it once and every later section will have a known place.

The chapter applies one working method to every business application (NCERT, pp. 90 and 101):

1. List the elements of the application.
2. Decide, for each element, whether a value is entered directly or computed by a formula.
3. Prepare the template first, then enter the data.

The chapter also assumes two skills from Chapter 2 — the IF function and relative versus absolute cell addressing (NCERT, p. 90). If either is shaky, revise it in the Use of Spreadsheet Class 12 notes before starting this chapter.

In the order the book teaches them, the three applications are:

• Payroll accounting — salary computation from attendance and pay-scale data (pp. 87–92)
• Asset accounting — depreciation by SLM and WDV plus the fixed asset schedule (pp. 93–98)
• Loan repayment — yearly and monthly instalments with the PMT function (pp. 99–100)

Key Concept 1: Payroll Accounting — From Basic Pay to Net Salary

Payroll is what a business pays its employees. Every employee is paid on a pre-determined date under a contract, and the amount depends on days worked, grade of pay, applicable allowances and the deductions that apply (NCERT, p. 87).

The chapter splits the salary into earnings and deductions (NCERT, pp. 87–88). The earning heads are:

• Basic Pay — pay in the pay scale plus Grade Pay, excluding Special Pay
• Grade Pay — pay added to Basic Pay according to designation and pay band
• Dearness Pay — the portion of Dearness Allowance merged with Basic Pay
• Dearness Allowance (DA) — compensation for price-rise erosion of purchasing power, granted as a percentage of Basic Pay (+ Dearness Pay)
• House Rent Allowance (HRA) — paid to help the employee lease residential accommodation
• Transport Allowance (TRA) — paid to help the employee commute to work
• Other earnings — education, medical, washing and similar allowances

The deduction heads are:

• Professional Tax — statutory deduction under state government legislation
• Provident Fund (PF) — statutory social-security deduction, a percentage of Basic Pay (+ Dearness Pay)
• TDS — monthly deduction towards the employee’s yearly income tax liability
• Loan recovery — employee-authorised deduction towards a loan instalment
• Other deductions — advance recovery, festival advance and similar items

From these heads the chapter builds one calculation chain (NCERT, pp. 89–90). Learn the symbols before the formulas:

The chain runs in order: NOEDP and BPE first; then DA, HRA and TRA add up to TE; then PF, TDS and loan recovery add up to TD; finally NS = TE − TD.

Two spreadsheet techniques carry the entire payroll (NCERT, p. 90).

Nested IF. In the HRA and TRA columns the formula tests the employee type, and each test contains another test. The shape for HRA is:

=IF(C12="Sup", G12*$I$5, IF(C12="Nsup", G12*$I$6, 0)) The final level of the nest returns 0, so consultant and contract employees get nil HRA and nil TRA, exactly as the rate table in Figure 3.2 states (NCERT, p. 91).

Absolute addresses. The parameter block — NODM, DA rate, HRA rates, TRA amounts and PF rate — sits together in column I, rows 3 to 9, and every formula locks it with dollar signs, for example $I$4 for the DA rate. If the references were relative, copying a formula down would drag the rate cell along with it and corrupt every row below.

Worked Example: Net Salary for a Non-Supervisory Employee

The book’s own illustration is a 14-employee payroll (M/s XYZ Enterprises, February 2009, NCERT pp. 90–92). Here is the same chain with fresh values: an Nsup employee on Basic Pay Rs 18,500, 2 deduction days, a 30-day month, DA 35%, HRA 30%, TRA Rs 500, PF 12%, TDS Rs 2,800 and a loan instalment of Rs 1,500.

Final answer: net salary = Rs 22,618.00. The figures are rounded to two decimals; Excel keeps full precision, which can cause tiny differences of a few paise.

Key Concept 2: Asset Accounting — SLM, WDV and the Fixed Asset Schedule

A fixed asset gives the firm productive capability for more than one accounting year — land, buildings, plant and machinery. Because its life crosses accounting years, each year’s accounts must record the cost consumed in that year; that charge is depreciation (NCERT, p. 93).

Fixed assets include tangible assets (physical — building, machinery) and intangible assets (no physical dimension — patents, copyrights, trademarks). The book notes that depreciation is usually not provided on freehold land (NCERT, p. 93).

Straight Line Method (SLM) with the SLN Function

SLM spreads the asset’s cost over its useful life in equal yearly amounts. The chapter defines four quantities first (NCERT, p. 94):

• Acquisition cost = purchase value + transportation + installation + pre-operating expenses
• Total depreciable amount = acquisition cost − salvage value
• Straight line depreciation = total depreciable amount ÷ expected useful life
• Rate of depreciation = (straight line depreciation ÷ total depreciable amount) × 100

In Excel the yearly charge is a single built-in function in the depreciation column: =SLN(cost, salvage, life) (NCERT, pp. 94–95).

Worked Example: SLM Depreciation for a New Machine

A machine is purchased for Rs 5,60,000, with installation costs Rs 25,000 and pre-operating expenses Rs 15,000. Its salvage value is Rs 60,000 and its useful life is 9 years.

Final answer: the asset enters the books at Rs 6,00,000, depreciation of Rs 60,000 is allowed each year for 9 years, and the rate per the chapter’s definition is about 11.11%. On cost to use, the same figures read 10% — the chapter’s definition uses the total depreciable amount as the base (NCERT, p. 94).

Written Down Value Method (WDV) with the DB Function

WDV, also called the Declining Balance method, takes the current book value — not the original cost — as the base for the next year’s depreciation, so the charge is largest in the first year and falls afterwards (NCERT, p. 95). Excel implements it with the DB function, which takes five arguments (NCERT, p. 96):

Two of these arguments come from helper columns (NCERT, pp. 96–97):

• Period — if the asset was installed after March, take the current year minus the year of installation; if installed between January and March, add one year. The chapter’s formula reads =IF(MONTH(C5)>3, YEAR($F$3)-YEAR(C5), YEAR($F$3)-YEAR(C5)+1).
• Months in 1st year — the months between the first year-end date and the installation date, rounded.

The depreciation column then calls =DB(cost, salvage, life, period, month).

SLN vs DB: Comparison Table

The Fixed Asset Schedule (Net Block = Gross Block − Depreciation)

Asset accounting ends with the schedule that forms part of the balance sheet (NCERT, p. 98). Its columns fall into three blocks:

• Gross Block — opening balance + additions − deductions = closing value (in the chapter’s layout, column E = B + C − D)
• Depreciation — opening balance + additions − deductions, where the additions are transferred from the depreciation computation sheet
• Net Block — Gross Block − Depreciation, computed at both the opening and closing dates

The closing net block is the figure that appears as the asset’s book value in the balance sheet.

Key Concept 3: Loan Repayment — Using the PMT Function

A loan is borrowed money — the principal — repaid through periodic instalments at a pre-specified rate of interest. Working out instalments by hand is an iterative process; Excel’s PMT function does it in one step (NCERT, p. 99).

PMT takes five arguments (NCERT, p. 99):

The chapter’s layout computes a yearly instalment first and then divides by 12 for the monthly instalment (NCERT, p. 100):

=PMT(rate, nper, -loan, 0, 1)  then  =yearly instalment / 12 Two details decide the result (NCERT, p. 100). The loan amount is entered negative — PMT returns a negative value because the instalment is money paid out, so the minus sign turns the result into a positive instalment.

The future value is zero — this is the chapter’s own explanation: at the end of the loan period, the balance payable is zero assuming repayments are made regularly.

The book tests the layout on a Rs 1,00,000 TV loan at 10% for two years and a Rs 2,50,000 car loan at 11% for three years. For the TV loan, the yearly instalment works out to Rs 52,380.95 and the monthly instalment to Rs 4,365.08 (NCERT, p. 100).

Hand-check for a one-year case: Rs 60,000 at 12% repaid at the end of the year is \( 60000 \times 1.12 = 67200 \) — one instalment of Rs 67,200, which is what PMT returns for rate 12%, nper 1, pv −60,000.

How to Read the Spreadsheet Layouts (Figures 3.1 to 3.13)

The figures in this chapter are spreadsheet layouts and data tables, not diagrams. Every one follows the same pattern: columns for direct entry sit alongside columns that compute values from formulas, and the parameters the formulas need are kept together in one locked block.

Because the printed page is narrower than a spreadsheet, wide layouts print in two parts, (a) and (b), and the employee or asset name is repeated in the second part only for reference.

• Figures 3.1–3.3 — the payroll layout (pp. 90–92). Figure 3.1 lists every column from Employee No. (A) to Net Salary (R) and states whether it holds a value or a formula; Figure 3.2 is the rate table (DA, HRA by employee type, TRA, PF); Figure 3.3 shows the finished 14-employee payroll for February 2009 — part (a) covers columns A–K up to gross salary, part (b) covers the PF, TDS, loan and net salary columns.
• Figures 3.4–3.5 — the SLM layout (pp. 94–95). Figure 3.4 maps the columns from asset name to life; the Depreciation column holds the SLN function. Figure 3.5 shows the M/s GUNGUN Ltd layout with asset name, salvage value, life, allowed depreciation and the resulting depreciation, split into (a) and (b) with the asset name repeated.
• Figures 3.6–3.8 — the WDV layout (pp. 96–97). Figure 3.6 lists the five DB parameters; Figure 3.7 maps the helper columns Period and Months in 1st Year that prepare the DB arguments; Figure 3.8 shows the same two assets under DB, with depreciation computed by the function.
• Figures 3.9–3.10 — the fixed asset schedule (p. 98). Figure 3.9 gives the formulas behind Gross Block, Depreciation and Net Block; Figure 3.10 shows the completed schedule for Building, Plant & Machinery, Office & Other Equipment, Furniture & Fixtures and Vehicles.
• Figures 3.11–3.13 — the loan layout (pp. 99–100). Figure 3.11 explains the five PMT parameters; Figure 3.12 maps the loan columns with the yearly and monthly instalment formulas; Figure 3.13 shows the repayment schedule for the two example loans.

Rule of thumb for reading any of them: first identify which columns are direct entries and which contain formulas, then check which parameter cells the formulas lock with dollar signs. Everything else in the figure follows from that.

Key Terms and Definitions Used in This Chapter

These are the terms the chapter itself defines, listed in the order the book introduces them. The page column points to the first definition.

Common Mistakes in Payroll, Depreciation and Loan Spreadsheets

The book itself flags where spreadsheet users go wrong — in its Notes box and its Skill Review — and these are the same errors that will appear in your own worksheets.

What the End-of-Chapter Questions and Skill Review Test

The chapter ends with three sets of exercises on pages 101–103, and each set tests a different level: recognition, recall and hands-on building.

The multiple choice questions mostly ask you to identify financial function arguments — Rate is the interest per period, Nper is the total number of payments, and a formula such as =PMT(...) belongs to the financial category of functions (NCERT, p. 101). The set also checks general spreadsheet knowledge, such as the correct arguments of the IF function and the extend-selection shortcut.

The answer key is printed at the very end of the chapter (NCERT, p. 104).

The short answer questions ask for the meanings of PV and FV, the purpose of the DB function, the difference between WDV and SLM, the two depreciation methods and the Excel functions used for each, and why relative and absolute addresses behave differently when formulas are copied — plus two small numerical problems on future value and present value (NCERT, p. 102).

Skill Review Task by Task (NCERT, p. 103)

A good skill-review answer is a working spreadsheet, not just an explanation: the formulas must sit in the correct cells, parameters must be locked where the chapter locks them, and every computed value should be verified with a manual check.

Textbook contents and the examinable syllabus are not always identical — check the current official CBSE syllabus before deciding what to spend revision time on.

One-Page Summary: The Three Applications in the Order NCERT Teaches Them

This is the chapter’s own closing summary (NCERT, p. 101) restated as a revision checklist.

• MS-Excel handles three business applications here: payroll calculation, fixed asset accounting and loan repayment schedules.
• Start any application by listing its elements, then decide for each element whether it is a direct entry or a formula result.
• Excel’s built-in financial functions turn complex calculations into single formulas — SLN and DB for depreciation, PMT for loan instalments.
• Absolute addresses keep copied formulas pointing at the same parameter cells.
• The IF function implements different actions for different conditions, and a nested IF handles three employee types in one column.
• PMT computes the loan repayment schedule, with the future value set to zero for regular repayment.

Related Chapters and Resources

Chapter 3 builds directly on Chapter 2, which introduces the IF function and relative versus absolute cell addressing (NCERT, p. 90). For the surrounding material, these pages cover the set:

• Use of Spreadsheet Class 12 notes — the previous chapter
• Class 12 Accountancy notes
• Class 12 notes
• CBSE notes
• Dissolution of partnership firm notes

Reference: NCERT Class 12 Computerised Accounting System textbook, chapter 3, official edition on ncert.nic.in.

Sources and Data Verification

• This page describes the NCERT Class 12 Accountancy textbook Computerised Accounting System, Chapter 3 (Use of Spreadsheet 3).
• It covers the chapter’s three applications — payroll accounting, asset accounting and loan repayment — and does not cover the other chapters of the book.
• The page is maintained for the current academic session using the NCERT information available to us.
• NCERT settles textbooks, editions and official PDFs; CBSE settles the curriculum, syllabus and examinations.

Frequently Asked Questions About Use of Spreadsheet 3 Class 12

What is the difference between SLN and DB functions used for depreciation?

SLN implements the Straight Line Method — the same depreciation amount every year, computed as (cost − salvage) ÷ life. DB implements the Written Down Value, or Declining Balance, method — the base is the current book value, so the charge is high in early years and falls later. SLN takes 3 arguments (cost, salvage, life); DB takes 5 (cost, salvage, life, period, month) (NCERT, pp. 94, 96).

Why does the PMT formula in this chapter use a negative loan amount and a zero future value?

Excel’s PMT returns a negative number because the instalment is money paid out; entering the loan amount negative flips the result into a positive instalment. FV is 0 because, with regular repayment, the balance at the end of the loan period is zero — that is the chapter’s own explanation (NCERT, p. 100).

What does the Period argument of the DB function depend on?

It depends on when the asset was installed. If installation was after March, Period = current year − year of installation; if the asset was installed between January and March, the formula adds one more year (NCERT, p. 96).

What is the difference between PV and FV in the loan repayment example?

Pv (present value) is the loan amount today — the money received. Fv (future value) is the balance at the end of the loan period, taken as 0 assuming regular repayment has brought the balance to zero (NCERT, pp. 99–100).

When is depreciation not charged on fixed assets?

The chapter states that depreciation is usually not provided on freehold land (NCERT, p. 93). Land owned outright is the standard exception; other fixed assets like building, plant and machinery are depreciated over their useful lives.

Which Excel functions does Chapter 3 use for payroll, depreciation and loan repayment?

Payroll uses the nested IF function for HRA and TRA along with absolute references; depreciation uses SLN for the Straight Line Method and DB for the Written Down Value method; loan repayment uses PMT (NCERT, pp. 90, 101).