Question

Explain various methods of recording joint venture transactions. Give entries in each case

Answer 1

There are 3 methods....I m explaining one of them.....

Joint venture where two or more venturers work together for Sharing profits or risk...

when venturers want to maintaine separate books.

1. Joint venture.....it is a nominal A/c.

it is just like a trading and profit or loss A/c....in Dr. side cost of goods and expenses,goods supplied by venturers should be shown

2. co-venturers A/c....these are personal A/c....

in cr. side capital invested, goods supplied from own stock, profit of Joint venture A/c

in Dr side....loss of Joint venture, drawings

3. Joint bank A/c.....it is a real A/c.

(just like a cash book) Dr. what comes in credit what goes out..