Hire Purchase, Credit Sales And Rental Agreement
This article deals with the features of Hire Purchase and the differentiation between Hire Purchase, Credit Sale and Rental Agreement:-
Features of Hire Purchase
When goods are purchased under a Hire Purchase Agreement:
- Vendor of the goods leases the asset to the purchaser on the terms that the purchaser shall pay to the vendor hire charges equivalent to the cash purchase price plus interest on the outstanding balance.
- The legal title to the assets does not pass to the purchaser until he has paid his final installment and exercise his option to purchase
- On default of payment, the vendor can reclaim/repossess the asset subject to certain clauses of the Hire Purchase Acts?
Credit Sales Agreement:-
Here, the legal title of the goods passes to the purchaser immediately on delivery and the purchase price is payable by installments. In the eve
Rental Agreement:-
The legal title to the goods remains with the vendor and for as long as the customer possess the goods, he has to pay a rental charge.
- Accounting For Hire Purchase In The Purchaser’s Book
- Difference Between Hire Purchase And Installment System
- Medium Term Financing- Hire Purchase and Leasing Facility (Part 1)
- How To Apportion Hire Purchase Interest-Reducing Balance Method (Part 1 of 3)
- How To Apportion Hire Purchase Interest-Straight Line Method (Part 2 of 3)
- How To Apportion Hire Purchase Interest-Using Sum Of Digit Method Or Rule Of 78 (Part 3 of 3)
- How Can Computerized Sales Ledger Assists In Credit Management
December 12, 2007
Tags: Credit sales, Hire Purchase, Rental
Posted in: Hire Purchase
One Response
Well…
I am really impressed because the total detail in one topic.
Thank you
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