The joint venture accounting can be done in

any of the following two ways:

1.When the separate set of books are maintained
2.When the separate set of books are not maintained
Joint Venture Accounting with Separate Books

• Joint bank account

• Joint venture account
• Co-venturers account
• (1) Joint Bank Account
• The co-venturers 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-venturers make 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.
• (2) Joint Venture Account
• This 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.
• (3) Co-venturers’ Accounts
• Personal accounts of the venturers are maintained to keep a record of
their contributions of cash, goods. Expenditure directly paid and
payments directly received by co-venturers are also recorded in this
account. The profit or loss so made on the venture is transferred to this
account in the agreed profit sharing ratio. This account is also closed
on completion of the venture.