Joint Venture Accounts

A joint venture is when two or more businesses decide to work together and set up a new business.

• True

• False

When two or more people come together and set up a new business, it is called a joint venture.

• True

• False

A partner in joint venture may enjoy full ownership of the company.

• True

• False

Joint Venture means two or more parties co-operate on a particular project without forming a permanent business entity.

• True

• False

Which of the following description is more likely to reflect the characteristic of a joint venture?

• The venturers cannot have their own business besides the venture.

• It will end immediately when the business is completed.

• Two parties joint together to make a continuing business.

• It is limited to the business of two parties only.

Ali and Billy entered into a joint venture to purchase and sale of goods. When goods purchased by Ali were sent to Billy for sales, whose books should be recorded?

• Ali's books

• Billy's books

• Both Ali's and Billy's books

• No record is needed

Which of the following transactions would appear in Memorandum Joint Venture Account?
I Cheque received by one venturer from another
II Drawings of goods for venturers’ personal use
III Unsold inventory taken over by venturers
IV Expenses paid by venturers

• I, II, III

• I, II, IV

• I, III, IV

• II, III, IV

Yi Qian and Shu Yin entered into a joint venture business. When the business is ceased and the unsold inventory was taken over by Shu Yin for her personal use.
What is the double entry accounting record should be taken?

• Dr Purchases

  Cr Joint Venture with DShu Yin

• Dr Drawings

  Cr Joint Venture with Shu Yin

• Dr Purchases

  Cr Joint Venture with Yi Qian

• Dr Drawings

  Cr Joint Venture with Yi Qian

Which of the following report is similar to a Memorandum Joint Venture account?

• Control account

• Income Statement

• Statement of Financial Position

• Cash Book

A and B entered into a Joint Venture. It was agreed that A should make the purchases and B arrange the sales. If no separate books were maintained by the Joint Venture, how should the entries be made in A’s books when A sent the goods to B?

• No entry

• Dr Joint Venture With B Account

  Cr Memorandum Joint Venture Account

• Dr Bank/ Account Receivable Account

  Cr Joint Venture With B Account

• Dr Joint Venture With B Account

  Cr Bank/ Account Receivable Account