Question

In which method of sales payment of purchase price is made in installments? (1)
a) Sales through tender b) Hire Purchase basis
c) Auction sales d) Wash sales

Answer 1

In hire Purchase basis, payment of purchase price is made in installments

Answer: Option b)

Explanation:

Hire Purchase is the System of buying goods by making regular payments until the full price is paid. Installment is a System of credit sale in which a sum of money or debt is paid regularly in installments.

Hire Purchase possesses the nature of hiring. Installment possesses the nature of selling. In Hire Purchase, the buyer cannot transfer or sell the good until the final installments are made. In Installment, the buyer can sell or transfer the ownership of the goods at any time.