DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : Y. Yella Reddy
Designation : HCCP
Branch : DCCP
Institute : 026, S.G.Govt. Polytechnic, Adilabad
Year/Semester : IV Semester
Subject : Accountancy – III
Subject Code : CCP402
Topic : Joint Venture
Duration : 50 Mts
Sub Topic : Maintenance of Accounts in a
separate set of books
Teaching aids : PPT and Animations
CCP402.25 1
Objectives :

On completion of the period, you would be

able to know:
 Maintenance of accounts in a separate set of
books

CCP402.25 2
Recap :

In the last class you learned about:

 Maintenance of accounts by all the

venturers

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Maintenance of Accounts in Separate
Set of Books (Joint Bank Method) :
 Under this method, the amount contributed by
each venturer is deposited into Joint Bank
Account and credited to individual Venturer’s
Account
 All purchases made and expenses incurred are
paid through Joint Bank Account
 Sales amount is deposited into Joint Bank
Account
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 Unsold goods may be taken over by one or
more venturers at an agreed value
 Profit or loss on Joint Venture is calculated
and distributed among the venturers as per
the ratio
 Balance due is paid to the venturers through
Joint Bank Account

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 When all the payments due on account of Joint
venture are made and the amount due to the
venturers is paid there will be no balance in the
Joint Bank Account
 This method is used in those cases where all
the venturers are of the same place and
venture undertaken is sufficiently large

CCP402.25 6
Maintenance of Accounts in Separate
Set of Books Journal Entries (Joint
Bank Method) :

1) Capital Investment by Co-Venturers:

Joint Bank a/c Dr.

To All Co-Venturers’ a/c

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2) For purchase of goods
(i) Cash purchases
Joint venture a/c Dr.
To Joint Bank a/c

(ii) For Credit Purchases

Joint Venture a/c Dr.
To Vendor’s a/c

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3) Expenses on Joint Venture
Joint Venture a/c Dr.
To Joint Bank a/c
4) Goods supplied by Co-Venturers from
their own stock
Joint Venture A/c Dr.
To Co-Venturer’s A/c
5) Expenses incurred for Joint Venture by
any Co-Venturer
Joint Venture A/c Dr.
To Co-Venturer’s A/c

CCP402.25 9
6) Sales for Joint Venture
(i) Cash sales
Joint Bank A/c Dr.
To Joint Venture A/c
(ii) Credit sales
Purchaser’s A/c Dr.
To Joint Venture A/c
(iii) When cash is received from
Purchaser
Joint Bank A/c Dr.
To Purchaser’s A/c

CCP402.25 10
7) Profit on Joint Venture
Joint Venture a/c Dr.
To Co-Venturers’ a/c

8) Loss on Joint Venture

Co- Venturers’ a/c Dr.
To Joint Venture a/c

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9) Settlement of Accounts of Co-venturers
If final payment is being made to Co-
Venturer
Co-Venturer’s a/c Dr.
To Joint Bank a/c

If the amount is received from Co-Venturer

on Final Settlement
Joint Bank a/c Dr.
To Co-Venturer’s a/c

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Summary :

 Preparation of Joint Venture accounts

under separate set of Books
 Joint Bank account
 Personal accounts of all venturers
 Journal entries

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Quiz :

1. In Joint Bank Method expenses incurred by

Co-Venturer is credited to
a) Joint Bank account
b) Joint Venture account
c) Co-Venturer’s account

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2. Loss on Joint Venture is credited to
a) Profit & Loss account
b) Co-Venturer’s account
c) Joint Venture account
d) None of the above

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3. Joint Venture account with Ramu is the
example of
a) Nominal account
b) Personal account
c) Real account
d) None of the above

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Frequently Asked Questions :

1. Explain the ‘Separate set of Books Method’ of

maintaining the Joint Venture Accounts ?
2. List the accounts which are opened for a Joint
Venture under Joint Bank Method ?

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