What is instalment system in trading?
Answers
Answer:
Batliboi, Instalment Purchase System is a system under there is an agreement to purchase and pay by instalments, the goods which become the property of the Purchaser immediately when he receives the delivery of the same. ... Under this system, there will be an outright sale of goods/assets.
In any business transaction,installment system basically refers to the sale on credit where the payment is made later on installment over a certain period of time.
Explanation:
Usually under installment or credit payment system,an agreement is made between the buyer and the seller of any product or service based on the condition that the buyer will pay the price of the good or service in installment within a specified period of time.The buyer is often required to make an advanced or down payment and the rest can be paid in full in installment within a certain period of time as agreed upon through formal agreement.However,the buyer can have complete possession of the good or service during the time of purchase based on a down payment.But it is understood that he or she make the full payment on installment in future within certain time period.