B.COM AFM-1 (Accounts For Hire Purchase) MCQ's




Question 1 :
Initial payment on signing the agreement is called Down Payment.

  1. TRUE
  2. FALSE
  

Question 2 :
In hire purchase agreement vendor pays interest to buyer.

  1. TRUE
  2. FALSE
  

Question 3 :
On Hire Purchase the ownership is transferred on payment of _____ instalment.

  1. First
  2. Last
  3. Down payment is made
  4. Agreement is signed
  

Question 4 :
Down payment is payment made down the table.

  1. TRUE
  2. FALSE
  

Question 5 :
Depreciation is provided on _____ _____.

  1. Principal
  2. Down Payment
  3. Cash Price
  4. None of the above
  

Question 6 :
Right of ownership is transferred to the buyer on payment of first instalment under Hire Purchase system.

  1. TRUE
  2. FALSE
  

Question 7 :
The seller of goods on H.P. is _____ _____.

  1. Buyer
  2. None of the above
  3. Customer
  4. Hire vendor
  

Question 8 :
_____ _____ _____ method is known as credit purchase method.

  1. Cash Price
  

Question 9 :
Hire purchase price is known as cash price.

  1. TRUE
  2. FALSE
  

Question 10 :
Buyer of goods under Hire purchase is called as a

  1. Hirer
  2. Buyer
  3. Customer
  4. None of the above
  

Question 11 :
Initial payment made on signing the agreement is

  1. Down payment
  2. Cash price
  3. Hire purchase price
  4. Interest
  

Question 12 :
Refer to Q. No. 20. The initial payment is

  1. ` 10,000
  2. ` 20,000
  3. ` 40,000
  4. None
  

Question 13 :
Instalment is equal to

  1. Principal + Interest
  2. Principal – Interest
  3. Cash Price + Interest
  4. None of the above
  

Question 14 :
Interest = Hire purchase price – _____ _____.

  1. Down Payment
  2. Cash Price
  3. Advance payment
  4. None of the above
  

Question 15 :
Generally costly items are sold on hire purchase basis.

  1. TRUE
  2. FALSE
  

Question 16 :
Under hire purchase system purchaser becomes the owner of goods on payment of

  1. Down payment
  2. Last intalment
  3. Interest
  4. None of the above
  

Question 17 :
In Instalment sale buyer becomes the owner of asset after payment of last payment.

  1. TRUE
  2. FALSE
  

Question 18 :
Generally _____ items are sold on hire purchase basis.

  1. Costly
  2. Factory
  3. Office
  4. None of the above
  

Question 19 :
Difference between hire purchase price and cash price is interest.

  1. TRUE
  2. FALSE
  

Question 20 :
Down payment is the initial payment made on signing the agreement.

  1. TRUE
  2. FALSE
  

Question 21 :
Fullcash price method is known as credit purchase method.

  1. TRUE
  2. FALSE
  

Question 22 :
In case of default in payment the seller under hire purchase can

  1. Take back possession of goods
  2. Take legal action against the buyer
  3. Charge penalty to the buyer
  4. None of the above
  

Question 23 :
Possession of goods is transferred on _____ the agreement.

  1. Cancelling
  2. Making
  3. Signing
  4. All of the above
  

Question 24 :
Actual cash price method is known as Asset Accrual method.

  1. TRUE
  2. FALSE
  

Question 25 :
The feature of hire purchase is

  1. User ultimately become the owner
  2. Instalment includea principal only
  3. User does not pay any interest
  4. None of the above
  

Question 26 :
Buyer does not provide depreciation on asset till he becomes the owner of asset.

  1. TRUE
  2. FALSE
  

Question 27 :
Cash price must be mentioned in the hire purchase agreement.

  1. TRUE
  2. FALSE
  

Question 28 :
Hire purchase agreement must have minimum duration of 5 years.

  1. TRUE
  2. FALSE
  

Question 29 :
Under hire purchase agreement the purchaser agrees to pay to the vendor

  1. Interest only
  2. Cash price only
  3. Cash price and interest
  4. None of the above
  

Question 30 :
Interest is always calculated on outstanding Cash Price.

  1. TRUE
  2. FALSE
  
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