Question

when goods are sold on instalment payment system, then what entries are passed in the books of the buyer and vendor?​

Answer 1

Installment System: Journal Entries in Books of Purchase and Vendor!

In installment system, there is an immediate sale, in which the price, instead of being paid in one lump sum, is spread over a period, interest being charged on unpaid balances. Under this system, the property in goods is passed on immediately to the buyer on signing the contract. The seller gives up the possession of the goods. If the buyer makes default in payment of instalment, the seller cannot repossess the goods but he can sue for the balance of debt.

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Answer 2

Answer:

Instalment payments are a payment plan arranged between the buyer and the seller. It’s usually clearly stated in the payment terms in a contract or on an invoice. These payments are generally arranged for a large order.

Explanation:

Installment System: Journal Entries in Books of Purchase and Vendor!

In an installment system, there is an immediate sale, in which the price, instead of being paid in one lump sum, is spread over a period, and interest is charged on unpaid balances.

• Under this system, the property in goods is passed on immediately to the buyer on signing the contract.
• The seller gives up the possession of the goods.
• If the buyer makes a default in payment of installment, the seller cannot repossess the goods but he can sue for the balance of the debt.
• The term ‘installment’ refers to anything paid in smaller batches over some time. This may include:
• Installment sale between a buyer and seller: For instance, purchasing a car with monthly installments. The agreement is between the car dealership and the car purchaser.
• Instalment loans: For instance, you receive a mortgage loan from a bank and pay it back in installments. The payments are towards a loan and usually incur interest.
• Instalment debt: For instance, paying off your tax bill, or someone who gave you money. Any debt that is repaid in installments.