Question

state four characteristic of hire purchase

Answer 1

- possession at the beginning
- ownership at the end
- right to use
- two parties
- payment in installments
- can claim depreciation

Answer 2

Answer:

Characteristics Of Hire Purchase System

Four Characteristics of Hire Purchase System are :-

• Arrangement For Contract :- Hire Purchase System originates from an agreement which involves two parties i.e. Hire-Vendor (seller) and Hire-Purchaser (buyer).

• Sales On Credit :- Hire Purchase System provides Credit facilities, to the Purchaser . The price of goods are not paid immediately but in periodic Installment.

• Right to take the goods back :- If the customer fails to pay the amount in Installment, then the vendor has a right to take the goods back .

• Ownership :- The ownership of goods remains with the Seller till the last installment is paid. The Purchaser gets the ownership only after paying the last installment of money.

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