Question

ASSIGNMENT-1 5 X 3 =15 Marks
1. Distinguish between hire purchase system and installment system.
అద్దె కొనుగోలు పద్ధతి వాయిదాల పద్దతి మధ్యగల తేడాలు తెలుపుము.​

Answer 1

Answer:

Hire Purchase System :-

• Hire Purchase System is an agreement which turns afterwards into sales after the payment of last installment.
• In Hire Purchase System, the ownership on goods are transferred to customer only after paying for the commodity.
• In Hire Purchase System, purchaser doesn't transfer the commodity to a third party before paying all the Installment.
• In Hire Purchase System, if a costumer is unable to pay Installments, the vendor can take back the goods considering the prepaid Installments by Purchaser as rent.
• In Hire Purchase System, the vendor bears the responsibility of repairs and maintenance of goods.
• In Hire Purchase System, there are two methods of Accounting in books of purchaser i.e. Assets Accrual Method and Credit Purchase Method.
• In, Hire Purchase System, the vendor bears minimum risk on sale by this system.

Installment Payment System :-

• Installment Payment System is a contract on credit basis and is made from beginning.
• In Installment Payment System, the ownership on goods are transferred to customer only at the time of transaction of sale.
• In Installment Payment System, the owner or seller doesn't have a right to take over the goods, if a costumer fails to pay Installments.
• In Installment Payment System, the buyer can transfer goods any time to third party after transaction.
• In Installment Payment System, the vendor can claim in court for the recovery of outstanding amount.
• In Installment Payment System, the vendor bears no responsibility concerning repairs and maintenance of the goods.
• In Installment Payment System, the accounts are maintained by only one method.
• The vendor bears maximum risks in Installment Payment System.