Class 12 Finance Important Chapter 15 Hire-Purchase

Class 12 Finance Important Chapter 15 Hire-Purchase Solutions English Medium As Per The New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 12 Finance Important Solutions in English and select need one. AHSEC Class 12 Finance Additional Notes Download PDF. HS 2nd Year Banking Additional Solutions.

Class 12 Finance Important Chapter 15 Hire-Purchase

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. ASSEB Class 12 Banking Additional Question Answer are part of All Subject Solutions. Here we have given HS 2nd Year Finance Important Solutions English Medium for All Chapters, You can practice these here.

Hire-Purchase

Chapter: 15

IMPORTANT QUESTION AND ANSWER

Short Questions and Answers: 

1. What is a hire-purchase transaction?

Ans: A hire-purchase transaction allows a buyer to take immediate possession of goods by agreeing to pay the price in instalments. The seller retains ownership until the last payment is made, and each instalment is treated as hire charges.

2. Who retains ownership of the goods in a hire-purchase system until all instalments are paid?

Ans: The seller retains ownership of the goods in a hire-purchase system until the buyer pays the final instalment.

3. What happens if a buyer defaults on an instalment in hire-purchase?

Ans: If a buyer defaults on an instalment, the seller can repossess the goods and may forfeit any amount already received as hire charges.

4. What is a down payment in hire-purchase?

Ans: A down payment is the initial amount paid by the buyer to the seller at the time of agreement and delivery of the goods; it does not include any interest.

5. What right does the hire-purchaser have regarding the agreement?

Ans: The hire-purchaser has the right to terminate the agreement at any time by giving at least fourteen days’ notice in writing, returning the goods, and stopping further payments.

6. Why are goods under hire-purchase typically of durable nature?

Ans: Goods sold under hire-purchase are typically durable and resaleable because they often involve higher-value items that can withstand multiple users or owners.

7. How does hire-purchase benefit the seller in terms of sales?

Ans: Hire-purchase increases the seller’s sales volume, boosts turnover, and reduces unsold stock accumulation by making goods more affordable for buyers.

8. What advantage does hire-purchase offer to buyers who lack large initial funds?

Ans: Hire-purchase enables buyers to acquire costly goods by paying through convenient instalments instead of making a heavy initial investment.

9. What is the primary disadvantage to the seller in the hire-purchase system?

Ans: The primary disadvantage for the seller is the need for large capital since goods are given on credit, making it difficult for small traders.

10. How is the price of goods affected under the hire-purchase system?

Ans: The price is generally higher in hire-purchase due to the inclusion of interest on unpaid instalments, making the total cost more than an outright purchase.

Fill in the Blanks:

1. Hire-purchase is a transaction where payment is made in __________.

Ans: Instalments.

2. The ownership of goods in a hire-purchase system remains with the __________ until the last instalment is paid.

Ans: Seller.

3. The seller can __________ the goods in case of default in payment of any instalment.

Ans: Repossess.

4. Each instalment in a hire-purchase agreement is treated as __________ until the last instalment is paid.

Ans: Hire charges.

5. The initial payment made by the buyer at the time of agreement is called __________.

Ans: Down payment.