Question

Specify the preparation of joint venture account.​

Answer 1

In order to prepare Memorandum Joint Venture Account, one co-venturer sends another co-venturer a copy of the account kept by him. On the basis of the copy of account and his own account, Memorandum Joint Venture is prepared.

Answer 2

A joint venture account is created for the calculation of business profits.

• It is a particular agreement, where two or more independent associations mutually accept to combine their key assets.
• All the related gains, losses and expenses are the accountability of each of the partners. However the venture is an entity that is independent from its members
• In the specific event of either cash sales or credit sales, the active account is properly credited and a bank account or debtor account is debited.  
• Each co-venturer debits the account and credits other co-venturers' personal accounts on either products purchased or other co-venturers' considerable expenses.