BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cost less depreciation to date less amount owing on hire purchase less interest owing
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Cost less amounts owing on hire purchase
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Cost less depreciation to date
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Cost less depreciation to date less amount owing on hire purchase
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Detailed explanation-1: -The value of the asset bought through hire purchase will appear as cost less depreciation to date on the balance sheet of a company.
Detailed explanation-2: -The depreciation on an asset purchased through hire purchase should be based on the cost price of the asset only. Was this answer helpful?
Detailed explanation-3: -The correct answer is Cash Price.
Detailed explanation-4: -The term depreciation refers to an accounting method used to allocate the cost of a tangible or physical asset over its useful life. Depreciation represents how much of an asset’s value has been used. It allows companies to earn revenue from the assets they own by paying for them over a certain period of time.
Detailed explanation-5: -Hire Purchase Accounting: Under Hire Purchase System, hire purchaser pays the cost of purchased asset in number of instalments. The ownership of the goods is transferred by the Hire Vendor only after payment of outstanding balance.