CMA Intermediate · Financial Accounting · Joint Venture
In accounting for a joint venture, which method requires a separate set of books to be maintained for the venture, with a Joint Venture Account, a Joint Bank Account and personal accounts of co-venturers?
The separate set of books method requires a distinct set of books for the venture, containing a Joint Bank Account, a Joint Venture Account and co-venturers' accounts. The other methods use each venturer's own books and do not need a complete independent ledger.
- ASeparate set of books methodCorrect
- BEach co-venturer records only his own transactions method
- CMemorandum joint venture account method only
- DConsignment account method
Explanation
Under the separate set of books method, the venture is treated like a distinct business with its own Joint Bank Account, Joint Venture Account and co-venturers' capital or personal accounts. The other methods use the co-venturers' existing books and do not need a full separate set.
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