Question

When an asset is acquired on
hire purchase system, the asset
account is debited with--------
of the assets in the books
of the hire
purchase
A Hine
purchase
price
B. Cash
Instalm​

Answer 1

It is debited with cash price.

• Under this system, If a buyer wants to buy an asset but does not want to pay in one lump sum, he will pay in part payments if the seller agrees.

• This allows the buyer to employ the asset when paying for it over a fixed period of time in part payments.

• When an asset is purchased by a hire purchase scheme, the asset account is debited with the cash value of the asset in the hire purchaser's accounts.