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WorksheetsUNIT 2: HIRE PURCHASE AND DEFERRED PAYMENT
Total questions: 15
Worksheet time: 8mins
Question 1: What is instalment trading?
A transaction where customers pay the full amount upfront.
A transaction allowing customers to buy with a deposit and pay the balance later.
A scheme where customers receive items without any payment.
A scheme where customers receive items with coupons.
In instalment trading, when does the customer gain ownership of the item?
Immediately after paying the deposit.
Before completing all instalments.
After completing all instalments.
At the time of delivery.
What is the purpose of allowing a small down payment in instalment trading?
To discourage customers from making purchases.
To show the trader's commitment to the customer.
To attract customers who cannot pay a large sum upfront.
To boost seller's confidence on selling the items
How is the outstanding balance paid in instalment trading?
In one lump sum at the end of the transaction.
Through fixed instalments over a period of time.
Through flexible instalments over a period of time.
By deducting a random amount from the buyer's account.
What can customers expect regarding interest in instalment trading?
No interest is added in most cases.
Interest is added only if the payment is delayed.
Interest is usually added to the cost price.
Interest is usually added to the sales price.
What is required upon the purchase of goods in a hire purchase agreement?
A fixed amount of instalment.
No payment is required.
A lump sum paid at the end of the agreement.
A 10% of deposit amount.
In hire purchase, when does the customer gain legal ownership of the goods?
Immediately upon purchase.
.
After approval of the hire purchase application.
After completion of payment of instalments.
Before completion of payment of instalments.
What happens if a customer defaults on payment in a hire purchase agreement?
The trader loses ownership of the goods.
The trader can repossess the item.
The customer gains legal ownership immediately.
The buyer can get discount from seller.
How does the period of payment affect the total cost in hire purchase?
Longer periods result in larger amounts of interest added.
Longer periods result in lower total costs.
It has no impact on the total cost.
Longer periods result in lower the profit of seller.
Why is a customer's annual income statement considered in the hire purchase process?
To confirm the customer's credit worthiness.
To calculate the final purchase price.
To determine the trader's profit margin.
To determine the trader's sales margin.
What is one advantage of hire purchase mentioned in the text?
Customers can put down a deposit and get the item immediately.
Customers must pay the full amount upfront.
Traders discourage customers from buying on the spot.
Customers encourage traders to sell item at low price.
How does hire purchase make the payment more manageable for customers?
Payment is required in one lump sum.
Online payment only accepted by traders.
Payment is spread over a long period, making instalments more affordable.
Payment is only accepted in cash.
What does the approval of a hire purchase agreement consider?
The customer's monthly salary and ability to pay over time.
The customer's fashion preferences.
The customer's ability to pay instalments before selling the item.
The customer's annual salary and ability to pay over time.
How do hire purchase schemes benefit traders?
Traders are encouraged to sell items on the spot.
Traders lose money on each transaction.
Traders are encouraged to buy items on the spot.
Traders encourage customers to delay payments.
According to the advantages mentioned, what aspect benefits customers in hire purchase?
High profit can receive by seller.
High costs of sales.
More affordable instalments.
Long waiting periods for approval.
