Question

When separate books for joint venture business are kept, the joint venture expenses _____________________.

• A. Shall be credited to 'Joint Venture A/c'
• B. Shall be credited to 'Other Partner's A/c'
• C. Shall be credited to 'Joint Bank A/c'
• D. Shall be Debited to 'Memorandum Joint Venture A/c'

Answer 1

Answer: (C)

Shall be credited to 'Joint Bank A/c'

The co-ventures open a separate bank account for the venture transactions. They make initial contributions to this account. The bank account is normally operated jointly. Expenses are met from this Joint Bank Account. Sales or collections from transactions are deposited into this account.

However, if any co-venturer makes direct payments and direct collections; in such a case their Personal Accounts will be credited/ debited for the transactions done. On completion of the venture, the Joint Bank Account is closed by paying the balance to co-ventures.