Meaning of Hire Purchase SystemTypes Of Sales: Cash sales Credit sales Hire purchase system Installment payment systemMeaning of Higher Purchase systemCharacteristics Or Advantage Of Hire Purchase System: For middle class family. Payment in "installment". Delivery at once. Ownership not transferred. Repair (seller) - In case of accident. Repair (purchaser) - In case of accident (intentionally). Non payment = Repossessed No money refund. "Ownership transferred" after last installmentMeaning of Installment Payment systemCharacteristics Or Advantage Of Installment Payment System For middle class family. Payment in "installment". Delivery at once. Ownership transfer at once. Repair ( Purchaser) - In case of accident. Repair ( Purchaser) - In case of accident (intentionally). Non payment = do not repossessed but case in court (recovery of proceeding act 1985). After payment of final installment = NOCDifference between Hire Purchase System and Instalment Payment SystemIMPORTANT TERMS:Hire Purchaser Hire Vendor Cash priceHire purchase price Down payment Installment Include interestInstallment without interestWhen interest rate is not given:1. Equal Installment Amount 2. Equal Installment PeriodWhen cash price is not given:1. Annuity method2. Back Calculation MethodAlgebraic methodBook of Hire VendorJournal Entries In The Books Of Hire Vendor (Seller)Books of Hire PurchaserRepair Reserve A/c Or Maintenance Suspense A/cHire Purchase System Exam questionsMeaning of Higher Purchase system: Hire the sold goods because ownership is still pending with the seller. purchase system is the system which is having the following features: (i) Under Hire Purchase system the purchaser shall make the payment of the assets in instalment not in lump-sum. (ii) Ownership of the assets will be transfer to the purchaser after the payment of all the installment. (iii) If the purchaser makes any default in payment of installment then the seller can repossessed.