Sales A/c
Purchase A/c
Hire Purchase Trading A/c
Profit & Loss A/c
Answer is Right!
Answer is Wrong!
The correct answer is: C. Hire Purchase Trading A/c
Hire purchase is a type of financing agreement in which the buyer agrees to pay for goods in installments over a period of time. The seller retains ownership of the goods until the final installment is paid.
The cost of goods sold in a hire purchase system is transferred to the hire purchase trading account. This account is used to track the cost of goods sold and the profit or loss from hire purchase transactions.
The other options are incorrect because:
- Sales account is used to record the sale of goods.
- Purchase account is used to record the purchase of goods.
- Profit and loss account is used to record the overall profit or loss of a business.