Question

Amount of Insurance claim received is dealt in the following manner in Joint Venture Account.

• A. Debited
• B. Credited
• C. None of these
• D. Both (A) and (B)

Answer 1

Answer: (B)

Credited

This account is prepared for measurement of venture profit. This account is debited with all venture expenses and credited with all sales or collection. The excess balance of credit side over the debit side shows the profit on joint venture and vice versa. Profit /Loss are transferred to co-venture's accounts in the profit-sharing ratio.

Entry for insurance claim received is as:-

Joint bank A/c Dr. xx

To Joint venture account xx