Accounting For Ventures / Joint Venture Accounts:
Learning Objectives:
-
Define and explain the terms
consignment, consignor and consignee.
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What is the difference between
consignment and sale?
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Make journal entries in the
books of consignor and that of consignee.
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Prepare consignment account
and consignee's account in the books of consignor.
Definition and
Explanation of Joint Venture:
A joint venture is a temporary partnership of
two or more persons engaged in any particular business adventure of
enterprise of short or seasonal duration.
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Difference Between Joint Venture and Consignment:
In joint venture, parties to the agreement are
known as co-ventures while in consignment they are termed as consignor and
consignee.
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Advantages
and Disadvantages of Joint Venture:
Smart entrepreneurs and business owners know that Joint Ventures are the fastest and most effective way to radically increase sales and profits with virtually no money and no risk, as long as its done correctly.
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Joint Venture Accounting - Journal Entries:
There are two methods in which joint
venture account can be kept These are:
- Where no separate books are kept to
record joint venture transactions.
- Where as separate set of books is kept
to record the transactions.
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Memorandum Joint Venture
Account:The is another
method to record the transactions in the books of the various parties. Under
this method the joint venture account is prepared on memorandum basis, just
to find out the profit or loss but not as a part of financial books.
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General Questions and Answers About Joint
Venture Accounting:
Find the
answers of various general questions and answers about joint venture
accounting.
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Joint Venture
Accounting Exercises and Problems:
Solved problems about joint venture
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problems.
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