State whether the following statements are True or False

  1. Under Hire-Purchase System the title or ownership of goods is transferred immediately on signing the Hire-Purchase Agreement.
  2. The hirer has a right to terminate the agreement at any time before the property so passes.
  3. The property in goods is to pass to hirer on the payment of last installment under Hire-Purchase System.
  4. Hire Purchase Price = Cost Price + Profit Margin – Interest.
  5. The amount of cash price and interest is not the same even in between equal installments.
  6. Under Hire-Purchase System, interest is charged on the unpaid cash price.
  7. Asset is always recorded by the hire purchaser as Cash Price plus Interest.
  8. In the last year, interest represents the difference between the last installment to be paid and cash price unpaid.
  9. Interest is calculated only on outstanding installments.
  10. Interest is allowed on the down payment made.
  11. Depreciation is not written off in Hire-Purchase System.
  12. Hire-Purchase System of sale is similar to a method of financing the purchase of fixed assets.
  13. Normally, the asset on Hire-Purchase Account will not be shown in the Balance Sheet.
  14. Any balance left in Goods Repossessed Account is transferred and shown in the Balance Sheet.
  15. Under Installment System, the seller cannot repossess the goods, even if there is default in installment.