JAMB Commerce 2020 Objective — Question 5

Question 5 of 40 from the Joint Admissions and Matriculation Board (JAMB) Commerce 2020 Objective paper, with the correct answer and a full explanation.

5. The difference between hire purchase and credit sales is a

A. A. OwnershipCorrect
B. B. Possession
C. C. No difference
D. D. time

Explanation

The major difference between hire purchase arrangement and credit sales is ownership of the product involved. In hire purchase, ownership is with the seller until the last instalment is paid but in credit sales, ownership is transferred to buyer immediately the contract is concluded even though the buyer pays nothing.

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