Question 1

If the hire purchaser fails to make payment of any installment, it is called _______&#10;A)default&#10;B)repossession&#10;C)sale&#10;D)purchase

Accepted Answer

When a hire purchaser fails to make a payment of any installment, it is referred to as a "default." This term is used to describe the failure to meet the legal obligations or conditions of a loan, such as when someone does not make a scheduled payment on time.

Question 2

If the hire vendor may take away all the goods on which there is default of installment it is called____________&#10;A)repossession&#10;B)partial repossession&#10;C)complete repossession&#10;D)purchase.

Accepted Answer

Complete repossession occurs when the hire vendor takes back all the goods due to a default in installment payments.

Question 3

The hire vendor takes away only a portion of the goods on which there is default of Installments it is called _________&#10;A)repossession&#10;B)partial repossession&#10;C)complete repossession&#10;D)purchase

Accepted Answer

Partial repossession occurs when the hire vendor reclaims only a portion of the goods due to default on installments, rather than taking back the entire goods or asset.

Question 4

In the books of hirer, for payment of installment hire vendor account will be ________&#10;A)debited&#10;B)credited&#10;C)rectified&#10;D)reversed

Accepted Answer

When a hirer makes a payment of installment, the hire vendor account is debited to record the reduction in the amount owed by the hirer to the vendor.

Question 5

In the books of hirer, for interest due at the end of the year hire vendor account will be _______&#10;A)debited&#10;B)credited&#10;C)rectified&#10;D)reversed

Accepted Answer

In the books of the hirer, for interest due at the end of the year, the Hire Vendor account will be credited because this interest is an expense for the hirer and increases the liability to the vendor.

Question 6

In the books of Hirer, the interest and depreciation account will be transferred to ______.&#10;A)trading account&#10;B)p & l account&#10;C)p & l appropriation account&#10;D)balance sheet

Accepted Answer

In the books of the hirer, the interest and depreciation account related to an asset acquired under a hire purchase agreement are transferred to the profit and loss account. This is because both interest and depreciation are considered expenses incurred in the process of generating revenue, and thus, they are accounted for in the profit and loss account to reflect their impact on the net income.

Question 7

Nature of hire purchase agreement is __________.&#10;A)agreement of sale&#10;B)option to transfer&#10;C)option to buy&#10;D)option to sell

Accepted Answer

A hire purchase agreement is essentially an option to buy, where the hirer has the option to purchase the goods at the end of the agreement.

Question 8

In case of Hire-Purchase the total sum payable by the hire-purchaser as per terms in order to complete the transactions is&#10;A)net cash price&#10;B)net hire-purchase charges&#10;C)hire-purchase price&#10;D)cash price instalment

Accepted Answer

The total sum payable by the hire-purchaser to complete the transaction in a hire-purchase agreement is known as the hire-purchase price. This includes the cash price of the asset plus interest and other charges over the term of the agreement.

Question 9

Under ______ system the buyer does not get ownership of goods immediately&#10;A)installment&#10;B)hp&#10;C)installment and hp&#10;D)none of these

Accepted Answer

In a hire purchase (hp) system, the buyer does not get ownership of the goods immediately; ownership is transferred after all payments are made.

Question 10

________ means the price at which the goods can be purchased by the hirer for ready cash.&#10;A)hp price&#10;B)installment price&#10;C)cash price&#10;D)down payment

Accepted Answer

Cash price refers to the amount at which goods can be bought outright with a single payment, as opposed to being paid for in installments or on credit.

Question 11

________ is the initial payment made at the time of signing the hire purchase agreement&#10;A)hp price&#10;B)installment price&#10;C)cash price&#10;D)down payment

Accepted Answer

The answer of ________ is the initial payment made at...

Question 12

The difference between hire purchase price and the cash price is called ______&#10;A)hire charges&#10;B)cost of the asset&#10;C)installment price&#10;D)cash price

Accepted Answer

The answer of The difference between hire purchase price and...

Question 13

In order to deal with the re possession the hire vendor operates an account called _______&#10;A)asset account&#10;B)goods account&#10;C)goods repossessed account&#10;D)none of these

Accepted Answer

The answer of In order to deal with the re...

Question 14

Hire Purchase price =&#10;A)cash price + down payment&#10;B)cash price + total interest&#10;C)cash price&#10;D)sum of total instalments

Accepted Answer

The answer of Hire Purchase price =&#10;A)cash price + down...

Question 15

Cash Price =&#10;A)hire purchase price - total interest&#10;B)down payment in cash&#10;C)down payment + interest&#10;D)none of the above

Accepted Answer

The answer of Cash Price =&#10;A)hire purchase price - total...

Question 16

Which of the following statement is false:&#10;A)a company is a legal entity quite distinct from its members&#10;B)a company can buy its own share&#10;C)a shareholder is the agent of the company&#10;D)same person can agent and creditor of the company

Accepted Answer

The answer of Which of the following statement is false:&#10;A)a...

Question 17

Which of the following are the characteristics of a company&#10;A)liability of the members is limited up to the face value of shares held by them&#10;B)it is a voluntary association of persons&#10;C)a company is a separate body can sue and be sued in its own name&#10;D)perpetual succession

Accepted Answer

The answer of Which of the following are the characteristics...

Question 18

Share application and allotment account is a:&#10;A)personal account&#10;B)real account&#10;C)nominal account&#10;D)none of the above

Accepted Answer

The answer of Share application and allotment account is a:&#10;A)personal...

Question 19

Securities premium account is shown on the liabilities side of the balance sheet under the head:&#10;A)share capital&#10;B)reserves and surplus&#10;C)current liabilities&#10;D)non-current liabilities

Accepted Answer

The answer of Securities premium account is shown on the...

Question 20

As per section 78 of the companies act, amount collected as premium on securities cannot be utilized for:&#10;A)issuing fully paid bonus shares to the members&#10;B)purchase of fixed assets&#10;C)writing off preliminary expenses&#10;D)buy back of it's own shares

Accepted Answer

The answer of As per section 78 of the companies...

Question 21

The portion of the authorised capital which can be called-up only on the liquidation of the company is called&#10;A)authorised capital&#10;B)reserve capital&#10;C)issued capital&#10;D)called up capital

Accepted Answer

The answer of The portion of the authorised capital which...

Question 22

Which of the following statement is false:&#10;A)buy back must be authorised by articles of company&#10;B)a special resolution must be passed for buy back&#10;C)shares can be partly paid up&#10;D)the ratio of debt owed by the company is not more than twice the capital and its

Accepted Answer

The answer of Which of the following statement is false:&#10;A)buy...

Question 23

If shares are bought back out of free reserves then a sum equal to nominal value of the shares so bought back is transferred to:&#10;A)capital reserve account&#10;B)capital redemption reserve account (crr)&#10;C)general reserve account&#10;D)statutory reserve account

Accepted Answer

The answer of If shares are bought back out of...

Question 24

Maximum buy back limit in any year is ______ of total paid up equity capital and free reserves.&#10;A)25%&#10;B)10%&#10;C)20%&#10;D)no limit

Accepted Answer

The answer of Maximum buy back limit in any year...

Question 25

Which of the following statement in false:&#10;A)bonus issue is made out of free reserves or securities premium collected in cash only&#10;B)bonus shares can be issued out revaluation profit&#10;C)no bonus issue shall be made within 12 months of any public or right issue&#10;D)company can issue bonus shares in any ratio.

Accepted Answer

The answer of Which of the following statement in false:&#10;A)bonus...

Deck 8: Hire Purchase Agreements and Company Accounting