Class 11 Retail Chapter 2 Process of Credit Application Solutions English Medium As Per AHSEC New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters Class 11 Retail Chapter 2 Process of Credit Application Question Answer and select need one. Class 11 Retail Chapter 2 Process of Credit Application Notes Download PDF. AHSEC Class 11 Elective Retail Question Answer English Medium.
Class 11 Retail Chapter 2 Process of Credit Application
Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. AHSEC Class 11 Elective Retail Textual Solutions are part of All Subject Solutions. Here we have given AHSEC Class 11 Retail Textbook Solutions English Medium for All Chapters, You can practice these here.
Process of Credit Application
Chapter: 2
| SESSION 1: FEATURES AND CONDITIONS FOR CREDIT SALES |
| Check Your Progress |
A. Fill in the blanks:
1. When goods are sold without receiving immediate ___________, it is called a credit sale.
Ans: Payment.
2. Credit sales are made between a ___________ and a __________ with a buyer agreeing to pay in instalments.
Ans: Seller, customer.
B. Multiple choice questions:
1. A requirement or event that should be performed before the ______________, is known as ‘Condition’.
(a) Completion of another action.
(b) Agreement.
(c) Treatment.
(d) None of the above.
Ans: (b) Agreement.
2. Which of these is an essential element of a contract of sale?
(a) Transfer of property.
(b) Money consideration.
(c) Goods.
(d) All of the above.
Ans: (d) All of the above.
C. State whether the following are True or False:
1. There must be at least three parties for contract of sale.
Ans: False.
2. In a contract of sale, the consideration is price.
Ans: True.
3. Agreement to sell means a contract of sale.
Ans: True.
D. Match the columns:
| Column A | Column B |
| 1. Condition | (A) Assurance. |
| 2. Warranty | (B) Consideration of contract of sale. |
| 3. Transfer of property | (C) Section 12(2) of the Indian Sale of Goods Act, 1930. |
| 4. Price | (D) Transfer of ownership. |
Ans:
| Column A | Column B |
| 1. Condition | (C) Section 12(2) of the Indian Sale of Goods Act, 1930. |
| 2. Warranty | (A) Assurance. |
| 3. Transfer of property | (D) Transfer of ownership. |
| 4. Price | (B) Consideration of contract of sale. |
E. Short answer questions:
1. Define credit sales.
Ans: Credit sales refer to sales that involve extending credit to the customer. The customer takes the product now and agrees to pay for it later. Credit sales are a type of trade credit. They create receivables, or money owed to the company from customers.
2. What are the benefits of credit sales?
Ans: The benefits of credit sales are as follows:
(i) Meet the competition: When competitors are making sales on credit to customers, any business will need to do the same just to stay competitive.
(ii) Increase in sales: An increase in sales may or may not happen when one starts selling on credit. If your competitors are not offering credit terms, then you will gain sales by offering credit terms, because your customers will buy from you instead of having to pay cash from your competitors.
(iii) Better customer loyalty: Offering credit to customers indicates that you respect and trust them to pay before their due dates. Customers will reward these gestures of confidence by continuing to buy from you.
3. What is a credit sale agreement?
Ans: A credit sale agreement is an agreement for the sale of goods under which the purchase price, or part of it, is payable by instalments.
4. What is a retail credit facility?
Ans: Retail credit facility is a financing method, which provides loan facility to retail consumers for purchasing goods and services. Retail credit facilities lend funds
to customers wanting to purchase high-valued items but are short on capital. Thus, retail credit facilities may enable a greater number of consumers access to a retailer’s goods. The risk of default is the main factor behind high rates of interest charged by retail credit facilities.
5. Explain agreement to sell.
Ans: Agreement to sell constitutes the terms and conditions of sale by the seller to the buyer. These terms and conditions include the amount at which it is to be sold and the future date of full payment.
F. Long answer questions:
1. Explain the features of credit sales.
Ans: Credit sale is selling goods to a customer by transferring from seller to the customer without paying the money immediately. Payment of goods can be done as per the agreement.
The features of credit sale are as given below:
(i) The transferor, normally, deals in goods and services.
(ii) The title of the goods lies with the seller before it is sold on credit.
(iii) There are fewer formalities, especially in the case of open accounts.
(iv) It is, usually, extended for three months.
(v) It depends on terms imposed by the seller.
(vi) No security is required.
(vii) It can be facilitated with different financial institutions with easy terms and conditions at a continuous rate.
(viii) Almost half of the short financial requirement of retail is met by this type of mutual trust and cordial relations.
2. What conditions are used for the sale of goods on credit?
Ans: A contract of sale is a legal contract for the exchange of goods, services or property from seller to buyer for an agreed upon value in money paid or the promise to pay the same. It is a specific type of legal contract.
There are some provisions in a contract of sale, which have been discussed below:
(i) The contract of sale is an agreement, in which a seller agrees to transfer goods to a buyer at a price. It is made when there is both an offer as well as an agreement to buy or sell goods for a price.
(ii) It can be made in writing or by word of mouth.
(iii) A contract of sale is a generic term, which includes:
(a) Sale and (b) Agreement to sell.
3. Write the differences between condition and warranty.
Ans: The differences between condition and warranty are as follows:
| Condition | Warranty |
| A requirement or event that should be performed before the completion of another action is known as condition. | A warranty is an assurance given by the seller to the buyer about the state of the product and that the prescribed facts are genuine. |
| Section 12 (2) of the Indian Sale ofGoods Act, 1930 | Section 12 (3) of the Indian Saleof Goods Act, 1930. |
| It is directly associated with theobjective of the contract. | It is a subsidiary provision related to the objective of the contract. Result of breach Termination of contract. Claim damages for the breach. |
| Termination of contract. | Claim damages for the breach. |
| Violation of condition can be regardedas a violation of the warranty | Violation of warranty does notaffect the condition. |
5. What are the essential elements of a contract of sale?
Ans: There are various essential elements which must be present in a contract of sale. These are as given below:
(a) Essential elements of a contract: All other essentials of a valid contract as per the Indian Contract Act, 1872, must be present. The parties of a contract must be competent, their consent must be free, and the objective of the contract must be lawful and so on.
(b) Bilateral contract: To make a contract of sale there must be at least two parties. These parties must be distinct, i.e., a seller and buyer.
(c) Transfer of property: In a contract of sale, the objective is to transfer the general property from the seller to the buyer in case of goods.
(d) Goods: The subject matter of the contract of sale of goods must be some goods. The purpose of this contract is to transfer the property in these goods from the seller to the buyer.
(e) Price the consideration: In a contract of sale the consideration is ‘price’. Price or consideration may be partly in money and partly in goods.
G. Check your performance:
1. Demonstrate the essentials of a contract of sale.
Ans: There are various essential elements which must be present in a contract of sale.
These are as given below:
(a) Essential elements of a contract: All other essentials of a valid contract as per the Indian Contract Act, 1872, must be present. The parties of a contract must be competent, their consent must be free, and the objective of the contract must be lawful and so on.
(b) Bilateral contract: To make a contract of sale there must be at least two parties. These parties must be distinct, i.e., a seller and buyer.
(c) Transfer of property: In a contract of sale, the objective is to transfer the general property from the seller to the buyer in case of goods.
(d) Goods: The subject matter of the contract of sale of goods must be some goods. The purpose of this contract is to transfer the property in these goods from the seller to the buyer.
(e) Price the consideration: In a contract of sale the consideration is ‘price’. Price or consideration may be partly in money and partly in goods.
2. Demonstrate the features of credit sales.
Ans: Credit sale is selling goods to a customer by transferring from seller to the customer without paying the money immediately. Payment of goods can be done as per the agreement.
The features of credit sale are as given below:
(i) The transferor, normally, deals in goods and services.
(ii) The title of the goods lies with the seller before it is sold on credit.
(iii) There are fewer formalities, especially in the case of open accounts.
(iv) It is, usually, extended for three months.
(v) It depends on terms imposed by the seller.
(vi) No security is required.
(vii) It can be facilitated with different financial institutions with easy terms and conditions at a continuous rate.
(viii) Almost half of the short financial requirement of retail is met by this type of mutual trust and cordial relations.
| SESSION 2: CREDIT CHECKS AND GETTING AUTHORISATION |
| Check Your Progress |
| SESSION 3: PROCESSING CREDIT REQUISITIONS |
| Check Your Progress |
| SESSION 4: TECHNIQUES FOR DETERMINING CREDITWORTHINESS |
| Check Your Progress |
Hi! my Name is Parimal Roy. I have completed my Bachelor’s degree in Philosophy (B.A.) from Silapathar General College. Currently, I am working as an HR Manager at Dev Library. It is a website that provides study materials for students from Class 3 to 12, including SCERT and NCERT notes. It also offers resources for BA, B.Com, B.Sc, and Computer Science, along with postgraduate notes. Besides study materials, the website has novels, eBooks, health and finance articles, biographies, quotes, and more.
