Financial Accounting MCQ on Hire Purchase System

MCQ on Hire Purchase and Instalment Purchase Systems

Financial Accounting MCQ on Hire Purchase System

Also Read Financial Accounting MCQ

1. Hire purchase act enacted in the year

 (a) 1971

(b) 1972

(c) 1973

(d) 1974

Answer (b) 1972

2. Hire purchase act came in to force with effect from

 (a) 1st Sept 1972

(b) 1st Sept 1973

(c) 1st Sept 1974

(d) 1st Sept 1975

Answer (b) 1st Sept 1973

3. In Hire purchase system, Hire purchase price comes under section

 (a) Sec 2(d)

(b) Sec 3(d)

(c) Sec 4(d)

(d) Sec 5(d)

Answer  (a) Sec 2(d)

4. In hire purchase system, Net hire purchase price comes under section

 (a) Sec 8(1)(e)

(b) Sec 8(2)(e)

(c) Sec 8(3)(e)

(d) Sec 8(4)(e)

Answer  (a) Sec 8(1)(e)

5. Net hire purchase price excluded

 (a) Delivery expenses

(b) Registration fees

(c) Cost of insurance

(d) All of the above

Answer (d) All of the above

6. In Hire purchase system, Net hire purchase charges comes under section

 (a) Sec 8(1)(d)

(b) Sec 8(1)(e)

(c) Sec 8(1)(f)

(d) Sec 8(1)(g)

Answer  (a) Sec 8(1)(d)

7. In Hire purchase system, Cash price comes under

 (a) Sec 4(1)(a)

(b) Sec 4(1)(b)

(c) Sec 4(1)(c)

(d) Sec 4(1)(d)

Answer (b) Sec 4(1)(b)

8. The amount paid at the time of hire purchase agreement is known as

(a) Installment

(b) Down payment

(c) Cash price

(d) Hire purchase price

Answer (b) Down payment

9. In hire purchase system cash price plus interest is known as

 (a) Book value of assets

(b) Capital value of assets

(c) Hire purchase price of assets

(d) Hire purchase charges

Answer (c) Hire purchase price of assets

10. Depreciation on hire purchase assets is claimed by

(a) Vendor

(b) Hire purchaser

(c) Buyer

(d) Seller

Answer (b) Hire purchaser

11. Under installment payment system ownership of goods

(a) Is transfer at the time of agreement

(b) Is transfer at the time of last installment

(c) Is not transfer

(d) None of the above

Answer (a) Is transfer at the time of agreement

12. The persons who obtained delivery of possession of goods from the owner under the hire purchase agreement is known as

(a) Purchaser

(b) Hirer

(c) Vendor

(d) None of the above

Answer (b) Hirer

13. The different between the net hire purchase price and net cash price of the goods is termed as

 (a) Hire purchase charges

(b) Installment

(c) Down payment

(d) None of the above

Answer  (a) Hire purchase charges

14. In hire purchase system, cash price instalment comes under section

(a) Sec 7(1)(a)

(b) Sec 7(1)(b)

(c) Sec 7(1)(c)

(d) Sec 7(1)(d)

Answer (a) Sec 7(1)(a)

15. The sum payable periodically by the hirer under the agreement

(a) Installment

(b) Consolidation

(c) Hire

(d) None of the above

Answer (c) Hire

16. Section of Right of owner to termination

(a) Sec 17

(b) Sec 18

(c) Sec 19

(d) Sec 20

Answer (c) Sec 19

17. The hire purchaser may terminate the hire purchase agreement after giving the owner at least …..Days’ notice in writing

(a) 14

(b) 21

(c) 51

(d) 41

Answer (a) 14

18. In hire purchase , the maximum statutory charge should not exceed …….. of the installment

(a) 20%

(b) 30%

(c) 40%

(d) 50%

Answer (b) 30%

19. Hire purchase price – cash price =?

 (a) Total interest

(b) Down payment

(c) Share

(d) None of the above

Answer  (a) Total interest

20. Hire Purchase Debtors is also known as

(a) Stock with costumer

(b) Installments Due

(c) Both of the above

(d) None of the above

Answer (b) Installments Due
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