Question

Three distinction between full repossession and partial repossession

Answer 1

Answer:

Default and Repossession When the Hire Purchaser does not pay the instalment, the Hire Vendor may repossess the goods sold. Full Repossession When the whole goods is repossessed. Partial Repossession When only a part of goods sold is repossessed.

Answer 2

Answer:

Goods Repossession Type # 1. Complete Repossession:

Under the circumstance the hire vendor closes the books of the Hire-Purchaser’s Account by transferring to Repossess Goods Account.

Similarly, the hire-purchaser also closes the account of Hire-Vendor Account by transferring to the balance of Asset Account.

Explanation:

Goods Repossession Type # 2. Partial Repossession:

In the case of partial repossession, however, there should be an agreement between the vendor and the purchaser relating to the valuation of goods repossessed. Under the circumstances, Vendor’s Account is debited and the Asset Account is credited with the agreed value of goods repossessed. Since, the entire goods are not repossessed, Asset Account will have a balance for the goods not repossessed which will be equal to the depreciated value of the assets not repossessed and, naturally, Vendor’s Account will show a balance which will represent the amount due to the purchaser.

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