Question

Step in Accounting for hire purchase

Answer 1

Answer:

Accounting in Hire Purchase System

Accounting records for the goods of substantial sales value.

There are two methods of Accounting in Hire Purchase System, In the books of Hire Purchaser :-

• Asset Accrued Method :- Asset Accrued Method is used when the higher purchase other things that he have become owner of the portion of goods only for which payment has been made.

• Credit Purchase Method :- Credit Purchase Method is used by the higher purchases who treat hire purchase as a real purchase.

In the books of Hire vendor, there is only one method.

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