Accounting Hire-purchase homework Help
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A firm buys and sells its entities in order to grow and do new investments. This purchasing and selling of assets under the consideration of future demand is the main key of accounting hire-purchase system. Students studying this topic will come to know about the benefits of forecasting about the asset purchase and how it may help the firm in future to generate revenue. Our Accounting hire-purchase homework help team contains the expertise required to make the students understand the topic. With the help of written assignments, homework and theories, our experts deal with accounting hire purchase system in a clear manner.
Introduction to Accounting hire-purchase system
It is a method of financing of fixed asset to be bought on a forecast value date. This provides the buyer with an advantage of payment in installments. The purchase price being paid in installments saves the extra money of the buyer to invest in other sources. The asset ownership is transferred to the buyer after the last installment is paid duly. From our Accounting hire-purchase homework help, we derive the most important features of accounting hire-purchase system. They are as follows
• The hire purchaser is not the owner of the asset unless and until the complete installments have been paid to the asset owner.
• Every installment paid is termed as the charges for using the asset of the owner.
• The hire vendor provides the rights to the purchaser to use the asset as soon as the agreement is made.
• If in any case the hire purchaser is unable to provide installments on time, the hire vendor has a right to take away the asset.
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Advantages of accounting hire-purchase system
Although there are many advantages listed in many links and accounting books. But our Accounting hire-purchase homework help team experts sort a few best ones to put your keen eye on. They are:
i. Hire purchase system makes the financing of asset an easy process for the buyer.
ii. The asset in future will belong to the hire purchaser if the installments are duly paid.
iii. The benefit of depreciation is enjoyed by the hire purchaser.
iv. The tax benefit of interest payable is also enjoyed by the hire purchaser.
Limitations of hire purchase system
i. The last installment to be paid is the mark without crossing which, the asset will not belong to the hire purchaser.
ii. Financing cost through the method of hire purchase is rather very high.
iii. Over small assets like automobiles, equipments required in office etc. possess very small magnitude of funds.
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