{"id":5815,"date":"2022-07-19T16:34:48","date_gmt":"2022-07-19T16:34:48","guid":{"rendered":"https:\/\/commerceiets.com\/?p=5815"},"modified":"2022-07-19T16:34:48","modified_gmt":"2022-07-19T16:34:48","slug":"joint-venture-notes","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/joint-venture-notes\/","title":{"rendered":"JOINT VENTURE NOTES &#8211; B.COM FIRST YEAR NOTES"},"content":{"rendered":"\n<h4 class=\"wp-block-heading\">Joint Venture notes on different methods of recording transactions relating to joint venture; difference between consignment and joint venture; difference between joint venture and partnership.<\/h4>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>QUESTION: Explain different methods of recording transactions relating to Joint Venture?<\/strong><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">JOINT VENTURE: The Joint venture may be defined as temporary\u00a0<a href=\"https:\/\/commerceiets.com\/partnership-business\/\" target=\"_blank\" rel=\"noreferrer noopener\">partnership<\/a>\u00a0between two or more persons without the use of firm\u2019s name for a specific purpose and limited time period. In other words, two or more persons agree to undertake a particular venture and to share the profits and losses thereof in an agreed ratio. The relationship of co-venturers is governed by the partnership law of land. <\/p>\n\n\n\n<p class=\"has-medium-font-size\">The various methods of recording transactions in <a aria-label=\"joint venture (opens in a new tab)\" href=\"https:\/\/commerceiets.com\/joint-venture\/\" target=\"_blank\" rel=\"noreferrer noopener\">joint venture<\/a> are as follows:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"720\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/09\/Slide2-4.jpg\" alt=\"JOINT VENTURE NOTES\" class=\"wp-image-2479\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/09\/Slide2-4.jpg 960w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/09\/Slide2-4-300x225.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/09\/Slide2-4-768x576.jpg 768w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><figcaption>JOINT VENTURE NOTES<\/figcaption><\/figure>\n\n\n\n<h4 class=\"has-text-align-center wp-block-heading\">METHOD 1: SEPARATE SET OF BOOKS ARE MAINTAINED<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">When this method this followed of maintaining the accounts\nof the joint venture, then following accounts are opened:<\/p>\n\n\n\n<ul><li><strong>JOINT BANK ACCOUNT<\/strong><\/li><li><strong>CAPITAL ACCOUNTS OF EACH CO-VENTURER<\/strong><\/li><li><strong>JOINT VENTURE ACCOUNT<\/strong><\/li><li><strong>ANY OTHER ACCOUNT OF DEBTOR, CREDITOR ETC. (if required).<\/strong><\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The journal entries passed under this method are as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>   FOR CAPITAL CONTRIBUTED BY CO-VENTURERS   <\/strong><\/td><\/tr><tr><td>   Joint Bank A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; To co-venturers personal   A\/c   <\/td><\/tr><tr><td><strong>   FOR PURCHASE OF GOODS AND ASSETS FOR JOINT VENTURE   <\/strong><\/td><\/tr><tr><td><strong>   For Cash   <br \/><\/strong>Joint Venture A\/c&nbsp;&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Joint Bank A\/c   <br \/><strong>On Credit   <br \/><\/strong>Joint Venture A\/c&nbsp;&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Supplier\u2019s A\/c   <\/td><\/tr><tr><td><strong>   ON PAYMENT OF EXPENSES   <\/strong><\/td><\/tr><tr><td>   Joint Venture A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Joint Bank A\/c   <\/td><\/tr><tr><td><strong>   ON SALE OF GOODS   <\/strong><\/td><\/tr><tr><td><strong>   For Cash<br \/><\/strong>Joint Bank A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Joint Venture A\/c   <br \/><strong>On Credit   <br \/><\/strong>Customer\u2019s A\/c&nbsp;&nbsp; Dr.<br \/>    &nbsp;&nbsp;&nbsp; To Joint Venture A\/c   <\/td><\/tr><tr><td><strong>   FOR PROFIT ON JOINT VENTURE   <\/strong><\/td><\/tr><tr><td>   Joint Venture A\/c Dr.<br \/>   &nbsp; &nbsp;&nbsp;To Co-venturer\u2019s personal A\/c    <\/td><\/tr><tr><td><strong>   FOR LOSS ON JOINT VENTURE   <\/strong><\/td><\/tr><tr><td>   Co-Venturer\u2019s Personal A\/c Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Joint Venture A\/c    <\/td><\/tr><tr><td><strong>   FINAL SETTLEMENT OF ACCOUNTS   <\/strong><\/td><\/tr><tr><td><strong>For amount due from co-venturers   <br \/><\/strong>Joint Bank A\/c\u00a0\u00a0 Dr.<br \/>   \u00a0\u00a0\u00a0\u00a0 To co-venturers personal   A\/c   <br \/><strong>For amount due to co-venturers   <br \/><\/strong>Co-venturers personal A\/c\u00a0\u00a0\u00a0   Dr.<br \/>   \u00a0\u00a0\u00a0\u00a0 To Joint Bank A\/c   <\/td><\/tr><\/tbody><\/table><figcaption>JOINT VENTURE NOTES<\/figcaption><\/figure>\n\n\n\n<h4 class=\"has-text-align-center wp-block-heading\">METHOD 2: JOINT VENTURE RECORDS MAINTAINED BY ONE OF THE\nCO-VENTURERS<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Under this method, all the Joint Venture transactions are\nrecorded by one of the co-venturers in his own books of accounts. In the books,\nthe co-venturer is authorized to record joint venture transactions. Generally,\nthe following accounts are opened under this method:<\/p>\n\n\n\n<ul><li><strong>JOINT VENTURE ACCOUNT : <\/strong>To calculate the profit or loss on the joint venture.<\/li><li><strong>PERSONAL ACCOUNT OF OTHER CO-VENTURERS:<\/strong> To record the joint venture transactions effected by other co-venturers and to ascertain the amount due from other co-venturer or due to another co-venturer.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The journal entries under this method are as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>   FOR CASH SUPPLIED BY CO-VENTURERS   <\/strong><\/td><\/tr><tr><td>   Cash\/ Bank A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; To co-venturers personal   A\/c   <\/td><\/tr><tr><td><strong>   FOR PURCHASE OF GOODS AND ASSETS FOR JOINT VENTURE   <\/strong><\/td><\/tr><tr><td><strong>For Cash   <br \/><\/strong>Joint Venture A\/c&nbsp;&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Cash A\/c   <br \/><strong>For goods supplied by self   <br \/><\/strong>Joint Venture A\/c&nbsp;&nbsp;&nbsp;&nbsp; Dr.   &nbsp;&nbsp;&nbsp;&nbsp; <br \/>       To Purchases A\/c   <\/td><\/tr><tr><td><strong>   ON PAYMENT OF EXPENSES   <\/strong><\/td><\/tr><tr><td><strong>   Payment of expenses by self   <br \/><\/strong>Joint Venture A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Cash\/ Bank A\/c<br \/><strong>   Payment of expenses by other co-venturer   <br \/><\/strong>Joint Venture A\/c&nbsp; Dr.   &nbsp;&nbsp;&nbsp; <br \/>      To co-venturer personal A\/c   <\/td><\/tr><tr><td><strong>   ON SALE OF GOODS   <\/strong><\/td><\/tr><tr><td><strong>   For Cash   <br \/><\/strong>Cash\/ Bank A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Joint Venture A\/c   <br \/><strong>On Credit   <br \/><\/strong>Customer\u2019s A\/c&nbsp;&nbsp; Dr.<br \/>    &nbsp;&nbsp;&nbsp; To Joint Venture A\/c   <\/td><\/tr><tr><td><strong>   FOR PROFIT ON JOINT VENTURE   <\/strong><\/td><\/tr><tr><td>   Joint Venture A\/c Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Profit and Loss A\/c<br \/>   &nbsp;&nbsp;&nbsp; To Co-venturer\u2019s personal   A\/c    <\/td><\/tr><tr><td><strong>   FOR LOSS ON JOINT VENTURE   <\/strong><\/td><\/tr><tr><td>   Co-Venturer\u2019s Personal A\/c Dr.<br \/>   Profit and Loss A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Joint Venture A\/c    <\/td><\/tr><tr><td><strong>   FINAL SETTLEMENT OF ACCOUNTS   <\/strong><\/td><\/tr><tr><td><strong>   For amount due from&nbsp;   co-venturers   <br \/><\/strong>Cash\/ Bank A\/c&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To co-venturers personal   A\/c   <br \/><strong>    For amount due to co-venturers   <br \/><\/strong>Co-venturers personal A\/c&nbsp;&nbsp;&nbsp;   Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Cash\/ Bank A\/c   <\/td><\/tr><\/tbody><\/table><figcaption>JOINT VENTURE NOTES<\/figcaption><\/figure>\n\n\n\n<h4 class=\"has-text-align-center wp-block-heading\">METHOD 3: JOINT VENTURE RECORDS\nMAINTAINED BY ALL CO-VENTURERS<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Under this method each venturer\nopen a joint venture account and the personal accounts of the other\nco-venturers. Suppose A and B enter into a joint venture then in A\u2019s books\njoint venture account and the personal account of B will be opened. Similarly,\nin the books of B joint venture account and the personal account of a will be\nopened.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">The journal entries to be passed\nare as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>   EXPENDITURE IS INCURRED OR GOODS SUPPLIED BY SELF   <\/strong><\/td><\/tr><tr><td>   Joint Venture a\/c Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Cash Account (for expenses)<br \/>   &nbsp;&nbsp;&nbsp; To Purchases Account    (for purchases)<\/td><\/tr><tr><td><strong>   EXPENSES IS INCURRED OR GOODS SUPPLIED BY CO-VENTURER    <\/strong><\/td><\/tr><tr><td>   Joint Venture A\/c<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Co-venturer Personal   A\/c   <\/td><\/tr><tr><td><strong>   FOR UNSOLD STOCK TAKEN OVER BY SELF   <\/strong><\/td><\/tr><tr><td>   Purchases A\/c&nbsp; Dr.<br \/>   &nbsp; To Joint Venture A\/c   <\/td><\/tr><tr><td><strong>   FOR UNSOLD STOCK TAKEN OVER BY CO-VENTURERS   <\/strong><\/td><\/tr><tr><td>   Joint Venture A\/c&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Co-venturer A\/c   <\/td><\/tr><tr><td><strong>   FOR PROFIT ON JOINT VENTURE   <\/strong><\/td><\/tr><tr><td>   Joint Venture A\/c Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Profit and Loss A\/c<br \/>   &nbsp;&nbsp;&nbsp; To Co-venturer\u2019s personal   A\/c    <\/td><\/tr><tr><td><strong>   FOR LOSS ON JOINT VENTURE   <\/strong><\/td><\/tr><tr><td>   Co-Venturer\u2019s Personal A\/c Dr.<br \/>   Profit and Loss A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Joint Venture A\/c    <\/td><\/tr><\/tbody><\/table><figcaption>JOINT VENTURE NOTES<\/figcaption><\/figure>\n\n\n\n<h4 class=\"has-text-align-center wp-block-heading\">METHOD 4: OWN RECORDS ARE\nMAINTAINED BY ALL CO-VENTURERS OR MEMORANDUM METHOD<\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Under this method, a co-venturer records only those transactions in which he himself entered into. Only one account is maintained under this method i.e. <strong>\u2018Joint Venture with Co-Venturer Account.\u2019<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">The Journal entries to be passed are as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>   GOODS PURCHASED FOR CASH   <\/strong><\/td><\/tr><tr><td>   Joint Venture a\/c Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Cash Account   <\/td><\/tr><tr><td><strong>   GOODS SUPPLIED FROM OWN STOCK  <\/strong> <br \/>Joint Venture A\/c Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Purchases A\/c   <\/td><\/tr><tr><td><strong>   EXPENSES INCURRED ON ACCOUNT OF JOINT VENTURE<br \/><\/strong>   Joint venture A\/c&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Cash\/ Bank A\/c   <\/td><\/tr><tr><td><strong>   FOR SALES MADE <br \/>  On Cash basis   <br \/><\/strong>Cash\/ Bank A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp;&nbsp; To Joint Venture with\u2026.   A\/c   <br \/><strong>On Credit basis<br \/><\/strong>Joint Venture with\u2026. A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; &nbsp;To Cash\/ Bank A\/c   <\/td><\/tr><tr><td><strong>   FOR UNSOLD STOCK TAKEN OVER BY SELF   <\/strong><\/td><\/tr><tr><td>   Purchases A\/c&nbsp; Dr.<br \/>   &nbsp; To Joint Venture with\u2026 A\/c   <\/td><\/tr><tr><td><strong>   FOR PROFIT ON JOINT VENTURE   <\/strong><\/td><\/tr><tr><td>   Joint Venture A\/c Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Profit and Loss A\/c   <\/td><\/tr><tr><td><strong>   FOR LOSS ON JOINT VENTURE   <\/strong><\/td><\/tr><tr><td>   Profit and Loss A\/c&nbsp;&nbsp;&nbsp; Dr.<br \/>   &nbsp;&nbsp;&nbsp; To Joint Venture A\/c    <\/td><\/tr><\/tbody><\/table><figcaption>JOINT VENTURE NOTES<\/figcaption><\/figure>\n\n\n\n<!--nextpage-->\n\n\n\n<h2 class=\"wp-block-heading\">JOINT VENTURE NOTES<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>QUESTION: Difference between Joint Venture and Consignment?<\/strong><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">JOINT VENTURE<\/h4>\n\n\n\n<p class=\"has-medium-font-size\"><a href=\"https:\/\/commerceiets.com\/joint-venture\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Joint venture (opens in a new tab)\">Joint venture<\/a> may be defined as temporary partnership between two or more persons without the use of firm\u2019s name for a specific purpose and limited time period. In other words, two or more persons agree to undertake a particular venture and to share the profits and losses thereof in an agreed ratio. The relationship of co-venturers is governed by the partnership law of land.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Joint venture normally enters into either<\/p>\n\n\n\n<ul><li>To complete a particular job<\/li><li>For a pre-contracted time limit period after\nwhich they are automatically terminated.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">CONSIGNMENT<\/h4>\n\n\n\n<p class=\"has-medium-font-size\"><a href=\"https:\/\/commerceiets.com\/consignment\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Consignment (opens in a new tab)\">Consignment<\/a> is a specialized kind of transaction which involves the two parties i.e. Consignor and Consignee. In this the consignor dispatches the goods to the consignee and consignee is required to sell those goods. For this, the consignee gets a commission. Consignment is a nature of transaction that leads to the expansion of business. The legal relationship between the consignor and consignee is of the agent and the principal.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">DIFFERENCE BETWEEN JOINT VENTURE AND CONSIGNMENT<\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>   BASIS OF DIFFERENCE   <\/strong><\/td><td><strong>   JOINT VENTURE   <\/strong><\/td><td><strong>   CONSIGNMENT   <\/strong><\/td><\/tr><tr><td>\n  NATURE\n  <\/td><td>\n  Joint venture is the temporary business between the two firms for a\n  particular purpose or up to limited time period.\n  <\/td><td>\n  Consignment is the dispatch of the goods by the consignor to the\n  consignee to be sold by the consignee.\n  <\/td><\/tr><tr><td>\n  PARTIES INVOLVED\n  <\/td><td>\n  The parties involved are known as Co-venturers.\n  <\/td><td>\n  The parties involved are known as Consignor and the Consignee.\n  <\/td><\/tr><tr><td>\n  RELATIONSHIP BETWEEN THE PARTIES\n  <\/td><td>\n  The relationship between the co-venturers is of associates and\n  partners.\n  <\/td><td>\n  The relationship between the consignor and consignee is of principal\n  and agent.\n  <\/td><\/tr><tr><td>\n  LEGISLATION\n  <\/td><td>\n  Joint venture is not governed by any special act, but being a\n  particular partnership, some rules of partnership law are applicable.\n  <\/td><td>\n  Consignment is governed by the law of agency as given under the\n  Indian Contract Act, 1872.\n  <\/td><\/tr><tr><td>\n  DURATION\n  <\/td><td>\n  Joint venture is for a specific purpose. That is why is generally for\n  short time period.\n  <\/td><td>\n  The consignment agreement is for a long period and does not come to\n  an end on the completion of a particular transaction.\n  <\/td><\/tr><tr><td>\n  SHARING OF PROFITS\n  <\/td><td>\n  Co-venturers share the profits or losses in the agreed ratio or\n  equally in the absence of the agreement.\n  <\/td><td>\n  In consignment, all the profit is of consignor.\n  <\/td><\/tr><tr><td>\n  CONSIDERATION\n  <\/td><td>\n  The profits earned on the venture is the consideration for the risk\n  undertaken by the co-venturer.\n  <\/td><td>\n  The consignee gets the commission as consideration for the goods sold\n  by him on the behalf of the consignor.\n  <\/td><\/tr><tr><td>\n  OWNERSHIP OF GOODS\n  <\/td><td>\n  The co-venturers are the joint owners of the goods and property of\n  the business.\n  <\/td><td>\n  The consignor is the owner of the goods, only the possession is\n  transferred to the consignee.\n  <\/td><\/tr><tr><td>\n  POWERS\/ AUTHORITY\n  <\/td><td>\n  All the co-venturers have equal rights or powers.\n  <\/td><td>\n  The consignee has not right in regard to the goods.\n  <\/td><\/tr><tr><td>\n  SCOPE\n  <\/td><td>\n  The scope of joint venture is wider. It consists of buying and\n  selling of goods, underwriting of shares and debentures.\n  <\/td><td>\n  The scope of consignment is narrow. It is concerned with the sale of\n  goods only.\n  <\/td><\/tr><tr><td>\n  CONTRIBUTION OF FINANCE\n  <\/td><td>\n  The finances are provided by all the co-venturers in case of a joint\n  venture.\n  <\/td><td>\n  In case of consignment business, consignor is the main provider of\n  finance.\n  <\/td><\/tr><tr><td>\n  MANAGEMENT\n  <\/td><td>\n  In joint venture, each co-venturer takes part in the management of\n  the business.\n  <\/td><td>\n  In consignment, only consignor is responsible of managing the whole\n  things.\n  <\/td><\/tr><tr><td>\n  LOSS OF GOODS\n  <\/td><td>\n  Co-venturers are equally responsible for loss of goods.\n  <\/td><td>\n  The consignor is responsible for the normal and abnormal loss of the\n  goods.\n  <\/td><\/tr><tr><td>\n  METHODS OF ACCOUNTING\n  <\/td><td>\n  There are four methods of keeping accounts i.e. separate set of books\n  are maintained, joint venture records maintained by all co-venturers or\n  records maintained by one of the co-venturer or memorandum method.\n  <\/td><td>   The methods of accounts followed are:   <br \/>Cost price method   <br \/>Invoice Price method   <br \/>Memorandum Method.   <\/td><\/tr><tr><td>\n  ACCOUNT SALES\n  <\/td><td>\n  No \u2018Account sales \/ is sent by the one co-venturer to another\n  co-venturer.\n  <\/td><td>\n  An \u2018Account Sales\u2019 is prepred and submitted by the consignee to his\n  consignor.\n  <\/td><\/tr><tr><td>\n  SUBJECT MATTER OF DEALING\n  <\/td><td>\n  Co-venturers can deal in both movable and immovable property.\n  <\/td><td>\n  Only movable property is the subject matter of the consignment.\n  <\/td><\/tr><tr><td>\n  TREATMENT OF CLOSING STOCK\n  <\/td><td>\n  The unsold stock belongs to all the co-venturers.\n  <\/td><td>\n  The unsold stock belongs to consignor only.\n  <\/td><\/tr><tr><td>\n  ACCOUNTS MAINTAINED\n  <\/td><td>   The accounts maintained are:   <br \/>Joint Venture A\/c   <br \/>Co-Venturer Personal A\/c   <\/td><td>   The accounts maintained are:   <br \/>Consignor\u2019s A\/c   <br \/>Consignee\u2019s A\/c   <br \/>Consignment A\/c   <br \/>Stock Reserve A\/c   <br \/>Commission A\/c   <br \/>Stock sent on Consignment A\/c   <\/td><\/tr><\/tbody><\/table><figcaption>JOINT VENTURE NOTES<\/figcaption><\/figure>\n\n\n\n<!--nextpage-->\n\n\n\n<h2 class=\"wp-block-heading\">JOINT VENTURE NOTES<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>QUESTION: Difference between Joint Venture and Partnership?<\/strong><\/h3>\n\n\n\n<h4 class=\"has-text-align-center wp-block-heading\">PARTNERSHIP<\/h4>\n\n\n\n<p class=\"has-medium-font-size\"><a href=\"https:\/\/commerceiets.com\/partnership-business\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Partnership (opens in a new tab)\">Partnership<\/a> business is a business where two or more persons agree to carry on commercial activity to earn profits. From legal point of view, partnership firm is not a separate legal entity. In other words, it has no existence separate from its partners. It means that in case of bankruptcy of partnership firm, private estates of partners would be liable to meet the firm\u2019s debts.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">The partners act both as an agent\nor principal of the firm. The persons who entered into a partnership with one\nanother is collectively known as Partnership or individually known as Partners.\nThe name of the partnership business is known as Firm Name. &nbsp;The\npartnership business is governed under Indian Partnership Act, 1932.<\/p>\n\n\n\n<h4 class=\"has-text-align-center wp-block-heading\">JOINT VENTURE<\/h4>\n\n\n\n<p class=\"has-medium-font-size\"><a href=\"https:\/\/commerceiets.com\/joint-venture\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Joint venture (opens in a new tab)\">Joint venture<\/a> may be defined as temporary partnership between two or more persons without the use of firm\u2019s name for a specific purpose and limited time period. In other words, two or more persons agree to undertake a particular venture and to share the profits and losses thereof in an agreed ratio. The relationship of co-venturers is governed by the partnership law of land.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Joint venture normally enters into either<\/p>\n\n\n\n<ul><li>To complete a particular job<\/li><li>For a pre-contracted time limit period after which they are automatically terminated.<\/li><\/ul>\n\n\n\n<h4 class=\"has-text-align-center wp-block-heading\">DIFFERENCE BETWEEN JOINT VENTURE AND PARTNERSHIP<\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>   BASIS OF DIFFERENCE   <\/strong><\/td><td><strong>   JOINT VENTURE   <\/strong><\/td><td><strong>   PARTNERSHIP   <\/strong><\/td><\/tr><tr><td>\n  Members\n  <\/td><td>   The members of business are known as <strong>CO-VENTURERS. <\/strong>  <\/td><td>   The members of business are known as <strong>PARTNERS.<\/strong>   <\/td><\/tr><tr><td>\n  Use of the firm name\n  <\/td><td>\n  In case of joint venture, there is no specific firm name.\n  <\/td><td>\n  In case of partnership, the firm has its own name.\n  <\/td><\/tr><tr><td>\n  Duration\n  <\/td><td>\n  It has short duration of time.\n  <\/td><td>\n  It is for long period.\n  <\/td><\/tr><tr><td>\n  Method of Accounting\n  <\/td><td>\n  It follows the cash basis of accounting.\n  <\/td><td>\n  It follows the Accrual basis of Accounting.\n  <\/td><\/tr><tr><td>\n  Freedom to carry on the same business activities.\n  <\/td><td>\n  The co-venturers are free to carry on the business of the same\n  nature.\n  <\/td><td>\n  The partners are not allowed to carry on the same business as of the\n  firm.\n  <\/td><\/tr><tr><td>\n  Maintenance of Accounts\n  <\/td><td>\n  The accounts are maintained in two ways i.e. separate set of books\n  are maintained and not separate books of accounts are maintained.\n  <\/td><td>\n  In this only separate set of books are maintained.\n  <\/td><\/tr><tr><td>\n  ASCERTAINMENT OF PROFIT\/ LOSS\n  <\/td><td>\n  The profit or loss is determined on the basis of each venture individually.\n  <\/td><td>\n  The profit or loss is determined on the periodical basis.\n  <\/td><\/tr><tr><td>\n  LEGISLATION\n  <\/td><td>\n  No specific act is there for joint venture.\n  <\/td><td>\n  Partnership is governed under Indian Partnership Act, 1932.\n  <\/td><\/tr><tr><td>\n  Doctrine of Implied Authority\n  <\/td><td>\n  The Doctrine of Implied Authority is not applicable to Co-venturers.\n  <\/td><td>\n  The Doctrine of implied authority is applicable to partners.\n  <\/td><\/tr><tr><td>\n  Concept followed\n  <\/td><td>\n  The joint venture accounts are made by following the liquidation\n  concept.\n  <\/td><td>\n  The partnership accounts are maintained by following Going Concern\n  Concept.\n  <\/td><\/tr><tr><td>\n  Settlement of Accounts\n  <\/td><td>\n  The accounts are settled on the completion of the venture.\n  <\/td><td>\n  The accounts are settled at the time of retirement, death, dissolution\n  of partnership.\n  <\/td><\/tr><\/tbody><\/table><figcaption>JOINT VENTURE NOTES<\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting\/\"><strong>Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/non-profit-organisation\/\"><strong>Non profit organisation<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/depreciation\/\"><strong>Depreciation<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/liquidity-ratios-types\/\"><strong>Liquidity ratios<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/nature-of-accounting\/\"><strong>Nature of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/receipt-and-payment-account-pdf\/\"><strong>Receipts and Payments Account<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/depreciation-accounting\/\"><strong>Depreciation Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/acid-test-ratio-formula\/\"><strong>Acid Test Ratio<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/benefits-of-accounting\/\"><strong>Benefits of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-accounting\/\"><strong>Scope of accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/hire-purchase-accounting-notes-pdf\/\"><strong>Hire Purchase Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cash-ratio\/\"><strong>Cash Ratio<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-cost-accounting-and-financial-accounting\/\"><strong>Difference between cost accounting and financial accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-financial-accounting-management-accounting-and-cost-accounting\/\"><strong>Financial accounting, cost accounting and management accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-hire-purchase-and-instalment\/\"><strong>Difference between hire purchase and instalment system<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/financial-ratio-analysis\/\"><strong>Financial ratio analysis<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-transaction-and-event\/\"><strong>Difference between transaction and event<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/transactions\/\"><strong>Transactions<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/users-of-accounting\/\"><strong>Users of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/current-ratio-formula\/\"><strong>Ratio analysis<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/limitations-of-accounting-2\/\"><strong>Limitation of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/capital-expenditure\/\"><strong>Capital Expenditure<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/instalment-system\/\"><strong>Instalment System<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-consignment-and-sale\/\"><strong>Difference between consignment and sale<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/book-keeping\/\"><strong>Book Keeping<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue-expenditure\/\"><strong>Revenue Expenditure<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reserves-accounting\/\"><strong>Reserves Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-normal-and-abnormal-loss\/\"><strong>Abnormal loss vs normal loss in consignment<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accountancy\/\"><strong>Accountancy<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-capital-expenditure-and-revenue-expenditure\/\"><strong>Difference between capital and revenue expenditure<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reserves-accounting\/\"><strong>Provisions&nbsp;<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/treatment-of-loss-on-consignment\/\"><strong>Treatment of loss on consignment<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-is-an-art-or-science\/\"><strong>Accounting as science or an art<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-equation\/\"><strong>Accounting Equation<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/single-entry-system-in-accounting\/\"><strong>Single entry system<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-treatment-of-consignment\/\"><strong>Accounting treatment of consignment<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-is-an-art-or-science\/\"><strong>Book Keeping vs accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/deferred-revenue-expenditure\/\"><strong>Deferred Revenue Expenditure<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/statement-of-affairs-and-balance-sheet-difference\/\"><strong>Difference between statement of affairs and balance sheet<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-joint-venture-and-consignment\/\"><strong>Joint venture vs consignment<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-is-an-art-or-science\/\"><strong>Book keeping vs accountancy<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/capital-receipt\/\"><strong>Capital receipt<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/ifrs\/\"><strong>IFRS<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/departmental-accounting\/\"><strong>Departmental Accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-is-an-art-or-science\/\"><strong>Accounting vs accountancy<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue-receipt\/\"><strong>Revenue receipt<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/balance-sheet\/\"><strong>Balance Sheet<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/methods-of-departmental-accounting\/\"><strong>Methods of departmental accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/basis-of-accounting\/\"><strong>Basis of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-capital-and-revenue-receipt\/\"><strong>Difference between capital and revenue receipt<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/profit-and-loss-account\/\"><strong>Profit and loss Account<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/allocation-of-expenses-in-departmental-accounting\/\"><strong>Allocation of expenses in departmental accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/branches-of-accounting\/\"><strong>Branches of accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-accounting-concepts-and-conventions\/\"><strong>Difference between accounting concepts and conventions<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/trading-account\/\"><strong>Trading Account<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/inter-departmental-transfers\/\"><strong>Inter-departmental transfers<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/cash-and-mercantile-system-of-accounting\/\"><strong>Cash and mercantile system of accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-standards\/\"><strong>Accounting Standards<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/voyage-account\/\"><strong>Voyage Account<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/different-types-of-branches\/\"><strong>Different types of branches<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/accounting-principles\/\"><strong>Accounting Principles<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/objectives-of-accounting\/\"><strong>Objectives of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-for-incomplete-voyage\/\"><strong>Accounting for Incomplete Voyage<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-departmental-and-branch-accounting\/\"><strong>Departmental vs Branch accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/golden-rules-of-accounting\/\"><strong>Golden ru\nles of accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-of-accounting\/\"><strong>Process of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/joint-venture\/\"><strong>Joint venture<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/methods-of-branch-accounting\/\"><strong>Methods of branch accounting<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/double-entry-system-of-accounting\/\"><strong>Double entry system of book keeping<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-accounting\/\"><strong>Scope of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-joint-venture-and-partnership\/\"><strong>Joint Venture Vs Partnership<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/incorporation-of-branch-trial-balance\/\"><strong>Incorporation of branch trial balance<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-double-single-entry-system\/\"><strong>Double entry vs Single entry system<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-accounting-concepts-and-conventions\/\"><strong>Accounting Concepts vs Accounting conventions<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/methods-of-recording-transactions-in-joint-venture\/\"><strong>Methods of recording transactions in Joint Venture<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/garner-vs-murray-rule\/\"><strong>Garner VS Murray Rule<\/strong><\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/history-of-accounting-pdf\/\"><strong>History of Accounting<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-provisions-and-reserves\/\"><strong>Difference between provisions and reserves<\/strong><\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consignment\/\"><strong>Consignment<\/strong><\/a><\/td><td><\/td><\/tr><tr><td><\/td><td><\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Joint Venture notes on different methods of recording transactions relating to joint venture; difference between consignment and joint venture; difference between joint venture and partnership. QUESTION: Explain different methods of recording transactions relating to Joint Venture? JOINT VENTURE: The Joint venture may be defined as temporary\u00a0partnership\u00a0between two or more persons without the use of firm\u2019s&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/joint-venture-notes\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;JOINT VENTURE NOTES &#8211; B.COM FIRST YEAR NOTES&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":5816,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[253],"tags":[163,303,304,305],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/5815"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=5815"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/5815\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/5816"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=5815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=5815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=5815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}