Question

Question
A hire purchase trader desiring to prepare a
separate hire purchase trading account will
follow
Full cash price method
Asset accrual method
Sales method
Stock method​

Answer 1

Answer:

I think asset accural method

Answer 2

Asset accrual method

Explanation:

• In this method, the assets are posted in general lodger Even if payment for these goods or services has not been received or paid. This method is most suitable for determining the financial status of the organization.
• To comprehend accrual accounting, we must first comprehend what we mean by the term accrual. Accrual is a term used in accounting to describe an entry in the general ledger that records income or expenditure for which there is no cash exchange.
• Accrual accounting is generally used in businesses where there are a lot of credit transactions or where products and services are sold on credit, meaning there was no cash exchange. Let us look at an example to better understand accrual accounting (or accrual accounting). Assume you're a company called M/S ABC Pvt Ltd, and you keep your books using accrual accounting. Any revenue or income made through sales, as well as any expenses incurred, are reported in this section.
• When you offer goods or services on credit, the sale is recorded in the books using the invoice generated. It's possible that you didn't receive the payment in cash at that point in time. When the raw material is ordered, an expense occurs or is recorded, not when the payment is paid to the supplier in cash or by check.
• The sole disadvantage of this accounting system is that you, as a business, may find up paying tax on revenues that you did not obtain (credit). On the income statement, expenses and revenues are balanced using the accrual method of accounting. It aids in providing a clearer picture of the company's financial situation.