CMA Foundation · Fundamentals of Financial and Cost Accounting · Joint Venture
Under the method where each venturer records only his own transactions in a joint venture, which entry does a venturer pass in his own books when he pays venture expenses in cash?
The venturer debits Joint Venture A/c and credits Cash A/c. Under this method he records only his own dealings, and expenses he pays for the venture are a charge against it, so they go to the debit of the Joint Venture account.
- AJoint Venture A/c Dr; To Cash A/cCorrect
- BCo-venturer's A/c Dr; To Cash A/c
- CExpenses A/c Dr; To Joint Venture A/c
- DCash A/c Dr; To Joint Venture A/c
Explanation
Under this method the venturer opens a Joint Venture account in his own books for his own dealings. An expense paid in cash is a charge to the venture, so Joint Venture A/c is debited and Cash is credited. Debiting the co-venturer would wrongly treat the payment as a dealing with the co-venturer.
Did you get it right without looking?
One question tells you little. A timed set on Joint Venture shows your real accuracy, how long you take and where you lose marks.
More Joint Venture questions
- A and B undertake a joint venture sharing profit 3:2. A purchased goods for ₹80,000 and incurred expenses of ₹4,000. B sold the goods for ₹1…
- P and Q are co-venturers sharing profits 2:1. P buys goods for Rs 90,000. Q pays expenses of Rs 12,000 and sells part of the goods for Rs 84…
- In the separate set of books method, co-venturer Anil pays ₹6,000 of venture expenses directly from his own pocket. What entry is made in th…
- Two firms run a joint venture and each keeps a full record of every venture transaction in its own books. Co-venturer Beta pays Rs 3,000 of …
- Anil and Bharat run a joint venture sharing profits and losses in the ratio 3:2. Anil buys goods for Rs 50,000. Bharat pays expenses of Rs 1…
- A and B start a joint venture sharing profits equally. A contributes Rs 60,000 and B contributes Rs 40,000 to the Joint Bank Account. Goods …