CMA Foundation · Fundamentals of Financial and Cost Accounting · Joint Venture

In a joint venture where each venturer maintains records of all transactions (the 'all transactions' method), which statement best describes the books of each co-venturer?

Each venturer records all transactions of the venture, including those of co-venturers, in his own books. He keeps a Joint Venture account and personal accounts of co-venturers, so the full venture result and each party's balance appear in every venturer's books.

1. AEach venturer records only his own transactions and opens a Joint Venture account with the co-venturer's personal account
2. BEach venturer records every transaction of the venture, including those done by co-venturers, and opens a Joint Venture account and personal accounts of the co-venturersCorrect
3. CSeparate books are opened for the joint venture and no Joint Venture account is prepared
4. DOnly the venturer managing the venture keeps books while others record just their share of profit