When goods are purchased for the joint venture, the account to be debited is __________________.
When goods are purchased for the joint venture, the account to be debited is __________________.
The correct option is B Joint venture account
A joint venture is an arrangement in which two or more parties agree to pool their
resources for the purpose of a specific task or transaction.
A joint
venture account is prepared for measurement of venture profit. This account is
debited with all venture expenses and credited with all sales or collections. 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-venturers’ accounts
in the profit-sharing ratio.
Goods bought on joint venture as well as expenses incurred in connection with the business are debited to the joint venture account and credited to the seller's account or the joint bank account.
A joint venture is an arrangement in which two or more parties agree to pool their resources for the purpose of a specific task or transaction.
A joint venture account is prepared for measurement of venture profit. This account is debited with all venture expenses and credited with all sales or collections. 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-venturers’ accounts in the profit-sharing ratio.
Goods bought on joint venture as well as expenses incurred in connection with the business are debited to the joint venture account and credited to the seller's account or the joint bank account.
