Part 1 shows the reducing balance method .
This article looks at how the hire purchase interest is apportioned over the period of the agreement using the Straight Line method.
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Note that the hire purchase interest needs to be apportioned over the period of the agreement. The commonly used methods are the Reducing Balance method,Straight Line method and Sum of Digits or Rule of 78 method Below example illustrate the Reducing Balance method to apportion hire purchase interest:- [...] [ click for more articles on credit management] In earlier article,we have said that we need to inform the customers of their credit limits. As time pass or when the customer requests higher credit limit,what should we base on to increase or decrease his credit limit? Append below are some of the major [...] [ click for more articles on credit management] To enable an effective follow up on customer’s overdue account,the credit controller should at least try to classify or categorize the customers into the following risk categories. However,try to be too rigid as these following risk profiles can change over a period of time whether [...] [ click for more articles on credit management] In earlier article,we have mentioned that one of the greatest contribution,credit function can offer is to facilitate the increase in sales/profit/liquidity is by thinking more proactively with sales personnel in the managing of marginal customers or those who want to increase the credit limits/terms. The [...] |  FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach. | |||||
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