Hire Purchase One Shot | Cash Price Method + Repossession + All Sums | CMA Inter Group 1

Hire Purchase & Instalment System One Shot Revision for CMA Inter Group 1 — Paper 6 Financial Accounting. This video covers ALL concepts from scratch — Hire Purchase vs Instalment System, Cash Price, Down Payment, Hire Purchase Price, interest calculation, Cash Price Method in the books of Purchaser, Full and Partial Repossession, and the Books of Hire Vendor — with three fully solved important questions so you can revise the entire chapter in one sitting before your exam. 📚 What you'll learn in this One Shot: ✔ Hire Purchase vs Instalment System — possession vs ownership, Hire Purchase Act 1972 vs Sale of Goods Act 1930 ✔ Cash Price, Down Payment, Instalments, Interest and Hire Purchase Price (HPP) — all relationships ✔ Down Payment rules — if not given assume zero; first instalment on agreement date is down payment ✔ How to check whether instalments include interest (DP + Instalments vs Cash Price) ✔ Shortcut method to calculate Cash Price from instalments (work backward from last instalment) ✔ Accounting in the books of Purchaser — Cash Price Method (year-wise entries) ✔ What entries are skipped from Year 2 onwards ✔ Exam approach: Asset Account + Hire Vendor Account only ✔ Depreciation — SLM vs WDV, and what to assume if method or rate is not given ✔ Full Repossession — entry at outstanding vendor balance, and loss on repossession ✔ Partial Repossession — agreed value, book value comparison, profit/loss on repossession ✔ Interest calculation when the rate is not given (split in ratio 3:2:1) ✔ Books of Hire Vendor — Sale Price Method and the opposite entries ✔ Three fully solved practical questions (Full Repossession, Partial Repossession, Interest Not Given) 👨‍🏫 Taught by: Abhimanyyu Agarrwal 📖 Course: CMA Intermediate Group 1 📄 Paper: Paper 6 – Financial Accounting 🙋 Frequently Asked Questions: Q1. What is the difference between Hire Purchase and Instalment System? A. In Hire Purchase, the buyer gets possession on paying the down payment but ownership stays with the vendor until the last instalment is paid, and the vendor can repossess the asset on default (Hire Purchase Act, 1972). In the Instalment System, ownership passes to the buyer on delivery, so the vendor cannot repossess (Sale of Goods Act, 1930). Q2. How is Hire Purchase Price (HPP) calculated? A. HPP = Down Payment + Sum of all Instalments = Cash Price + Total Interest. Q3. How do you know if instalments include interest? A. If Down Payment + Instalments equals Cash Price, instalments exclude interest; if it is more than Cash Price, instalments include interest. If Cash Price is not given, assume instalments include interest. Q4. What if the Down Payment is not given? A. Assume it to be zero. If the question says the first instalment is paid on the date of the agreement, treat it as the Down Payment. Q5. How is interest calculated each year? A. On the outstanding balance of the Hire Vendor account at the beginning of the year (after the down payment and previous instalments). Q6. What is the difference between Full and Partial Repossession? A. Full Repossession happens when a single asset is repossessed, and the asset is taken over at the outstanding balance of the vendor account. Partial Repossession happens when multiple assets are involved and only some are repossessed, at an agreed value; the difference from book value is profit or loss on repossession. Q7. What if the depreciation rate is not given? A. Ignore asset accounting and only prepare the Hire Vendor account. If the rate is given but the method is not, apply WDV. Q8. What changes in the Books of Hire Vendor? A. The entries are the exact opposite of the purchaser's: Hire Purchaser A/c Dr. to Sales, Bank Dr. to Hire Purchaser, Hire Purchaser Dr. to Interest, and so on, with no depreciation and no asset account. ⏱ Timestamps: 0:00 Introduction & Concepts 4:41 Cash Price, Down Payment, HPP & Interest 16:29 Shortcut: Calculating Cash Price 22:48 Accounting Procedure (Purchaser's Books) 28:49 Full vs Partial Repossession 32:56 Sum 1: Full Repossession (Truck) 47:05 Partial Repossession Rules 51:09 Sum 2: A Transport (Tempo) 1:15:50 Sum 3: Interest Not Given 1:22:35 Books of Hire Vendor 1:26:07 Closing 🔔 Subscribe for more One Shot Revisions of CMA Inter Group 1 & Group 2 — Financial Accounting, Corporate Accounting & more, only on this channel! 📲 Follow for updates: 📚 Join Our CA/ CMA Foundation & Intermediate Classes 👉 Modes: Face-to-Face (Kolkata), Live Online, Google Drive, and Pendrive 📞 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩: / 🌐 𝐕𝐢𝐬𝐢𝐭: ‎🌐 𝐖𝐡𝐚𝐭𝐬𝐀𝐩𝐩 𝐂𝐡𝐚𝐧𝐧𝐞𝐥: 🌐 𝐓𝐞𝐥𝐞𝐠𝐫𝐚𝐦: 🌐 𝐈𝐧𝐬𝐭𝐚𝐠𝐫𝐚𝐦: Download the PDF used in this video here: #CMAInter #HirePurchase #financialaccounting