BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When the deposit is paid
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When the hire purchase agreement is signed
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When the first instalment is paid
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When the final instalment is paid
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Detailed explanation-1: -When, final installment is paid and purchased agrees to a legal option to but the asset, then the asset legally belong to the purchaser under a high purchase agreement.
Detailed explanation-2: -Under the Hire Purchase System the Hire Purchaser gets possession of the goods at the outset and can use it, while paying for it in instalments over a specified period of time as per the agreement. However, the ownership of the goods remains with the Hire Vendor until the hire purchaser has paid all the instalments.
Detailed explanation-3: -In hire purchase system the last installment payable by buyer includes the cash price of installment and interest . The hire purchase act was passed in the year 1972 and looks after every hire purchase agreement.
Detailed explanation-4: -In hire purchase, ownership of the property is transferred to the hire on the payment of the last installment.
Detailed explanation-5: -In a hire purchase agreement, ownership is not transferred to the purchaser until all payments are made. Hire purchase agreements usually prove to be more expensive in the long run than purchasing an item outright.