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Hire Purchase - Journal entries in the books of Hire Vendor under sales method and intrest suspense method
Accountancy
When should Hire Purchase sales A/c[H.P.sales a/c] is to be closed i.e., transfered to Trading a/c At the time of down payment or At the time of last instalment or To the extent of cash price in each instalment
Answers (2)
Hire purchase sales account is like usual sales account (nominal) , transferred to profit and loss account at year end at the time of it's preparation. Hire purchaser account Dr. To HP sales account (Being assets sold under hire purchase agreement) Where as the hire purchaser account is credited for receipt of down payment and cash price of each instalment, such hire purchaser account is shown in assets side of balance sheet in the books of hire vendor.
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