In case of 'installment payment system', In the books of purchaser total interest receivable by the seller is credited to ______

This question was previously asked in
UP TGT Commerce 2019 Official Paper
View all UP TGT Papers >
  1. Interest Suspense Account
  2. Interest Account
  3. Sales Account
  4. None of the above

Answer (Detailed Solution Below)

Option 1 : Interest Suspense Account
Free
UP TGT Hindi FT 1
9.8 K Users
125 Questions 500 Marks 120 Mins

Detailed Solution

Download Solution PDF

The correct answer is Interest Suspense Account.

Key Points

  • A credit sale system in which payments are made in instalments over time is known as an instalment payment system.
  • In this method, the buyer receives both ownership and possession of the items at the time the contract is signed.
  • The vendor cannot respond to the items while the instalment is being paid.
  • In that circumstance, the vendor may only file a lawsuit against the customer to recoup unpaid debts.

Important PointsJournal Entries in the book of Buyer are as follows:

Date Particulars L.F Dr. Cr.
1. Asset A/c             Dr.      
   Interest Suspense A/c Dr.      
          To Vendor A/c      
  (on delivery for first year)      
2. Vendors A/c        Dr.       
          To Buyer A/c      
  (being Down payment made)      
3. Interest  A/c Dr.      
  To Interest Suspense A/c      
  (being interest due)      

 

Hence, the correct answer is Interest Suspense Account.

Latest UP TGT Updates

Last updated on May 6, 2025

-> The UP TGT Exam for Advt. No. 01/2022 will be held on 21st & 22nd July 2025.

-> The UP TGT Notification (2022) was released for 3539 vacancies.

-> The UP TGT 2025 Notification is expected to be released soon. Over 38000 vacancies are expected to be announced for the recruitment of Teachers in Uttar Pradesh. 

-> Prepare for the exam using UP TGT Previous Year Papers.

Get Free Access Now
Hot Links: teen patti gold apk download teen patti gold apk teen patti master download teen patti master apk