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

When each co-venturer records all joint venture transactions in his own books, which accounts does a venturer open to record them?

Each venturer opens a Joint Venture account and personal accounts of the other co-venturers. The venture account captures every purchase, expense and sale, while the personal accounts show what each co-venturer owes or is owed, so settlement can be computed from his own records.

  1. AA Joint Venture account and personal accounts of the other co-venturersCorrect
  2. BOnly a Joint Bank account kept in the names of all venturers
  3. COnly a Memorandum Joint Venture account without any personal accounts
  4. DA Consignee account and a Consignor account

Explanation

Under this method each venturer keeps a full set of records for the venture. He opens a Joint Venture account to collect the expenses and revenue of the venture. He also opens personal accounts of the other co-venturers to record their dealings with him. The memorandum account is used in a different method, so it is not the right answer.

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