75-Hire Purchase

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When examining for deficiencies of stock, a firm would not make allowances for which of the following?

Changes in market conditions

Stealing by customers

Thefts by employees

Wastage of goods

Which of the following is the act of buying an asset without having to make full payment in the immediate future?

Operating lease

Hire purchase

Sale and leaseback

Finance lease

The rules for how to deal with leases and hire purchase contracts is dealt with in which accounting standard?

FRS 16

FRS 19

SSAP 21

SSAP 20

Which of the following would not make a distinction between a hire purchase and a ‘normal’ purchase?

Purchaser pays for item by instalments over a period of time

Asset does not belong to purchaser when delivery is received from supplier

Cost to buyer is likely to be higher than it would be for a normal purchase

Trade discounts cannot be offered on hire purchase

On the balance sheet of a company, the value of the asset bought through hire purchase will appear as which of the following?

Cost less depreciation to date less amount owing on hire purchase less interest owing

Cost less amounts owing on hire purchase

Cost less depreciation to date

Cost less depreciation to date less amount owing on hire purchase

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