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Unit IVAccounting for Joint venture Q.1). RAWAL RATAN SINGH of Chittorgarh consigned 1000 units of 100 each to RANI PADMAVATI of SINGHAL. Expense made by RAWAL RATAN SINGH in such consignment are Rs. 20,000.RANI PADMAVATI paid unloading charges Rs. 5,000 and Rs.2 P.U. selling expenses.She sold all the goods at Rs.140 each and deducted 5% as commission and remitted draft for the balance. Prepare Ledger accounts in the books of Consignor. A1): - Ledger of Rawal Ratan Singh(Consignor) Dr. CONSIGNMENT A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Goods sent on Consignment (1000 X 100)	1,00,000	By Padmavati (Sales-1000 X 140)	1,40,000
T0 Cash (1000 X 20)	20,000
To Padmavati Non selling exp (1,000 X 5) Selling exp (1,000 X 2)	5,000 2,000
To Padmavati (Comm-1,40,000 X 5%)	7,000
To P&L (Bal.Fig)	6,000

TOTAL	1,40,000	TOTAL	1,40,000

Dr. PADMAVATI A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Consignment	1,40,000	By Consignment	6,600
		By Consignment	5,600
		By Bank (Bal.Fig)	1,27,800

TOTAL	1,40,000	TOTAL	1,40,000

Dr. Goods Sent On Consignment A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
		By Consignment	1,00,000
To Trading (transfer)	1,00,000
TOTAL	1,00,000	TOTAL	1,00,000

Q.2). On 15 Jan, 2013 J&K Co. of Mumbai sent to Muku & Co. of Kolkata 400 bicycle at an invoice price of Rs.100 per bicycle to be sold on commission. Freight and insurance were Rs.600. Accounts sale was received from consignee as follow: -15 March - 100 per bicycle were sold @ Rs.145 on which 5%. Commission and Rs.375 for expenses were deducted.10 April - 150 per bicycle were sold @ Rs.140 on which 5%. Commission and Rs.290 for expenses were deducted.From the above information prepare Consignment A/c in the books of J&K Co. and close it on 30 April, 2013 keeping in mind that no salves were made afterwards. Also show accounts in the books of Muku & Co.A2): -Ledger of J&K CO. (Consignor)Dr. CONSIGNMENT A/c Cr.

DATE	PARTICULAR	AMOUNT	DATE	PARTICULAR	AMOUNT
2013			2013
Jan 15	To GSOC	40,000	Mar. 15	By Muku (sales)	14,500
Jan 15	To Cash/Bank (J&K exp.)	600	Apr. 10	By Muku (sales)	21,000
Mar. 15	To Muku (exp.)	375	Apr. 30	By Stock on Consignment	15,225
Mar. 15	To Muku (commission)	725
Apr. 10	To Muku (exp.)	290
Apr. 10	To Muku (commission)	1,050
Apr. 30	To P&L (Bal. Fig.)	7,685

	TOTAL	50,725		TOTAL	50,725

Dr. MUKU’s A/c (Consignee) Cr.

DATE	PARTICULAR	AMOUNT	DATE	PARTICULAR	AMOUNT
2013			2013
Mar. 15	To Consignment (Sales)	14,500	Mar. 15	By Consignment (expense)	375
Apr. 10	To Consignment (Sales)	21,000	Mar. 15	By Consignment (Commission)	725
			Apr. 10	By Consignment (expense)	290
			Apr. 10	By Consignment (Commission)	1,050
			Apr. 30	By Balance c/d	33,060
	TOTAL	35,500		TOTAL	35,500

Dr. Goods sent on Consignment A/c Cr.

DATE	PARTICULAR	AMOUNT	DATE	PARTICULAR	AMOUNT
2013				2013
Apr. 30	To Trading A/c (transfer)	40,000	Jan. 15	By Consignment	40,000

	TOTAL	40,000		TOTAL	40,000

LEDGER OF MUKU & CO. (Consignee)Dr. J&K Co. A/c Cr.

DATE	PARTICULAR	AMOUNT	DATE	PARTICULAR	AMOUNT
2013			2013
Mar. 15	To Cash/Bank (expense)	375	Mar. 15	By Cash/Bank (Sales)	14,500
Mar.15	To Commission	725	Apr. 10	By Cash/Bank (Sales)	21,000
Apr. 10	To Cash /Bank (expense)	290
Apr. 10	To Commission	1,050
Apr. 30	To Balance c/d	33,060

	TOTAL	34,500		TOTAL	34,500

Dr. COMMISSION A /c Cr.

DATE	PARTICULAR	AMOUNT	DATE	PARTICULAR	AMOUNT
2013			2013
Apr. 30	To P&L (Bal.Tfd.)	1,775	Mar.15	By J&K (14,500 X 5%)	725
			Apr. 10	By J&K (21,000 X 5%)	1,050

	TOTAL	34,500		TOTAL	34,500

Working note: -Closing StockCost of Goods Sent.  Quantity sent 400 Cost of Goods (400 X 100) 40,000Add: - J&K Co. Expense 600b) Total Cost 40,600c) Quantity Sold 250d) Quantity in stock 150e) Closing Stock - Cost= Total Cost X Quantity in Stock / Quantity Sent= 40,600 X 150/400= 15,225Note: - It is assumed that the consignee's expenses are incurred after the goods have reached their godown and hence not included in valuation of stock. Q.3). On 1st November,2015, A of Calcutta sends goods costing Rs.1,00,000 to B of Delhi on Consignment basis. A paid Rs. 5,000 as freight and Rs. 2,000 as insurance.On 31st December,2015, an Account Sales was received from B disclosing that the entire quantity of goods were sold for Rs.1,50,000 out of which Rs. 30,000 was sold on credit A customer who purchased goods for Rs. 5,000 failed to pay and the debt proved bad. All other debts were collected by B in full. As per the agreement, B is allowed a commission @ 10% on sales. B sends the amount due to A by cheque.Prepare necessary Ledger accounts in the books of A & B. A3): -LEDGER OF ADr. CONSIGNMENT A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Goods sent on Consignment	1,00,000	By B’s (Cash sales)	1,20,000
To Cash/Bank Freight. 5,000 Insurance. 2000	7,000	By B’s (Cr. Sales)	30,000
To B's (commission) (10% of 1,50,000)	15,000
To B's A/c (Bad debt)	5,000
To P&L A/c (bal.fig.)	23,000

TOTAL	1,50,000	TOTAL	1,50,000

Dr. B's A/c. Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Consignment (Cash sales)	1,20,000	By Consignment (commission)	15,000
To Consignment (Cr. Sales)	30,000	By Consignment (bad debts)	5,000
		By Bank A/c (Remittance)	1,30,000

TOTAL	1,50,000	TOTAL	1,50,000

Dr. Goods sent on Consignment A/c. Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Trading A/c (transfer)	1,00,000	By Consignment A/c	1,00,000
TOTAL	1,00,000	TOTAL	1,00,000

LEDGER OF BDr. A's A/c. Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Commission	15,000	By Cash/ Bank (Sales)	1,20,000
To Consignment Debtors (Bad debts- no del credere comm)	5,000	By Consignment Debtors (Cr. Sales)	30,000
To Cash/Bank (Remittance)	1,30,000
TOTAL	1,50,000	TOTAL	1,50,000

Dr. CONSIGNMENT DEBTORS A/c Cr.

PARTICULAR	AMOUNT	PARTICULAR	AMOUNT
To A's	30,000	By Cash/Bank (collection)	25,000
		By A's (Bad debts no del cr. commission)	5,000
TOTAL	30,000	TOTAL	30,000

Q.4) Refer to question 3. Prepare the necessary ledger account, if in the above question the consignee is given a del credere commission of 5% on sales (In addition to ordinary commission)—other things remaining the same. A4): - LEDGER OF ADr. CONSIGNMENT A/c. Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To GSOC	1,00,000	By B’s (Cash sales)	1,20,000
To Cash/Bank Freight. 5,000 Insurance 2000	7,000	By B's (Cr. Sales)	30,000
To B's (commission) (10% of 1,50,000)	15,000
To B's (Del-Credere Commission)	7,500
To P&L (bal.fig.)	23,000
TOTAL	1,50,000	TOTAL	1,50,000

Dr. B's A/c. Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Consignment (Cash sales)	1,20,000	By Consignment (commission)	15,000
To Consignment (Cr. Sales)	30,000	By Consignment (Del-cr. commission)	7,500
		By Cash/Bank(Remittance)	1,27,500
TOTAL	1,50,000	TOTAL	1,50,000

Dr. Goods sent on Consignment A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Trading A/c (transfer)	1,00,000	By Consignment A/c	1,00,000
TOTAL	1,00,000	TOTAL	1,00,000

LEDGER OF BDr. A's A/c. Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To commission	15,000	By Cash/ Bank (Sales)	1,20,000
To Del credere commission	7,500	By Consignment Debtors (Cr. Sales)	30,000
To Cash/Bank (Remittance)	1,27,500
TOTAL	1,50,000	TOTAL	1,50,000

Dr. CONSIGNMENT DEBTORS A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To A's	30,000	By Cash/Bank (collection)	25,000
		By A's (Bad debts Adjusted)	5,000
TOTAL	30,000	TOTAL	30,000

Dr. Del Credere Commission A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Consignment Debtors (Bad Debts)	5,000	By A's	7,500
To P&L (Bal. Fig)	2,500
TOTAL	7,500	TOTAL	7,500

Dr. COMMISSION A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To P&L (Bal. Fig)	15,000	By A's	15,000
TOTAL	15,000	TOTAL	15,000

Dr. PROFIT & LOSS ACCOUNT Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Profit c/d to B/S	17,500	By Commission	15,000
		By Del Credere Commission (Net trfd.)	2,500
TOTAL	17,500	TOTAL	17,500

Q.5). Amit of Mumbai consigned 100 sewing machines to Sanjay of Surat to be sold on his risk. The cost of one machine was Rs.150, but the invoice price was Rs.200. Amit paid freight Rs. 600 and insurance in transit Rs.200 Sanjay sent a draft to Amit for Rs. 10,000 as advance and later sent an account sales showing that 80 machine were sold at Rs.220 each. Expenses incurred by Sanjay were carriage inward Rs. 25, Octroi Rs.75, godown rent Rs.500 and advertisement Rs.300. Sanjay is entitled to a commission of 5% on sales.Journalise the above transaction in the books of Amit and Sanjay. A5): - LEDGER OF AMITDr. CONSIGNMENT A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To GSOC	20,000	By Sanjay (Sales)	17,600
To Cash/Bank (Amit expenses)	800	By Stock on Consignment	4,180
To Sanjay (Expenses)	900	By GSOC (Load)	5,000
To Sanjay (Commission)	880
To Stock Reserve c/d	1,000
To P&L(bal.fig.)	3,200
TOTAL	26,780	TOTAL	26,780

Dr. SANJAY A/c. Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Consignment (Cash Sales)	17,600	By Cash/ Bank (Advance)	10,000
		By Consignment (Expenses)	900
		By Consignment (Commission)	880
		By Balance c/d	5,820
TOTAL	17,600	TOTAL	17,600

Dr. Goods sent on Consignment A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Consignment	5,000	By Consignment A/c	20,000
To Trading A/c (transfer)	15,000
TOTAL	20,000	TOTAL	20,000

LEDGER OF SANJAYDr. AMIT A/c Cr.

PARTICULAR	AMOUNT	PARTICULAR	AMOUNT
To Cash/ Bank (Advance)	10,000	By Cash/ Bank	17,600
To Cash/ Bank (Expenses)	900
To Commission	880
To Balance c/d	5,820
TOTAL	17,600	TOTAL	17,600

Q.6). On 1st July,2016, Rustom House of Ahmedabad consigned 100 keyboards to TCS of Mumbai. The cost of each keyboard was Rs.450 but the pro forma invoice price was Rs.600. Rustom House paid Rs.3000 for freight and insurance. On 7th July,2016, TCS accepted a 3 months’ bill drawn upon them by Rustom House for Rs. 30,000. TCS paid Rs. 1,200 as rent and Rs.750 for advertisement and up to 31st December,2016(On which Rustom House closes their books) they sold 80 keyboards @ 615 each. TCS were entitled to a commission of 5% on sales. Show the ledger accounts recording the above transaction in the books of Rustom House and TCS A6): -LEDGER OF Rustom HouseDr. CONSIGNMENT A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To GSOC	60,000	By TCS (Sales)	49,200
To Cash/Bank (Rustom House expenses)	3,000	By Stock on Consignment	12,600
To TCS (Expenses)	1,950	By GSOC (Load)	15,000
To TCS (Commission) (49,200 X 5%)	2,460
To Stock Reserve (Load)	3,000
To P&L(bal.fig.)	6,390
TOTAL	17,600	TOTAL	17,600

Dr. TCS A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Consignment (Cash Sales)	49,200	By Bills Receivable (Advance)	30,000
		By Consignment (Expenses)	1,950
		By Consignment (Commission)	2,460
		By Balance c/d	14,790
TOTAL	49,200	TOTAL	49,200

Dr. Goods sent on Consignment A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Trading A/c (transfer)	45,000	By Consignment A/c	60,000
To Consignment	15,000
TOTAL	60,000	TOTAL	60,000

LEDGER OF TCSDr. Rustom House A/c Cr.

PARTICULARS	AMOUNT	PARTICULARS	AMOUNT
To Bills Payable (Advance)	30,000	By Cash/ Bank(Sales)	49,200
To Cash/ Bank (Expenses)	1,950
To Commission	2,460
To Balance c/d	14,790
TOTAL	49,200	TOTAL	49,200

Q.7). D. Dogra of Delhi sent to his agent, M. Monga of Madras, 500 articles costing Rs.15/- per article at an invoice price of Rs.20 per article. The following payments were made by D. Dogra in this connection: freight and carriage Rs. 450, miscellaneous exp. Rs. 50. M. Monga sent a bank draft for Rs. 3,000 as an advance against the Consignment M. Monga sold 300 articles at a flat rate of Rs.28 per article and sent an Account Sales showing deduction for storage charges Rs.550 insurance Rs.550 and his Commission of 3% plus 2% Del Credere on gross sale proceeds, and remitted the amount due on consignment. M. Monga also informed D. Dogra that 50 articles were damaged in transit and thus they were valued at Rs.550. Journalise the above transactions in the books of the consignor and consignee. A7): -Books of Dogra (Consignor)Journal

				Dr.	Cr.
				Rs.	Rs.
(1)	Consignment to madras A/c Dr			7,500
	To Goods sent on Consignment A/c				7,500
(500 articles sent to M. Monga, Agent, Cost being Rs.15 per article).
(2)	Consignment to Madras A/c Dr			500
	To Bank Account				500
(Expenses incurred on the Consignment)
	Freight & Carriage	Rs.	450
	Miscellaneous Exp.	Rs.	50
			500
(3)	Bank Account Dr			3,000
	To M. Monga				3,000
(Advance received from the Agent in the form of Bank Draft.)
(4)	M. Monga Dr			8,400
	To Consignment to Madras A/c				8,400
(Sales affected by M. Monga as per Account Sales.)
(5)	Consignment to Madras A/c Dr			570
	To M. Monga				570
(Expenses incurred by M. Monga Rs.150 and Commission due to him, Rs.550 (5% of Rs. 8,400).
(6)	Bank Account Dr			4,830
	To M. Monga				4,830
(Amount due from the consignee received.)
(7)	P & Loss A/c Dr			350
	To Consignment to Madras A/c				350
(Abnormal Loss on 50 damaged Articles)
(8)	Stock on Consignment A/c Dr			2,850
	To Consignment to Madras A/c				2,850
	(Value of stock unsold at Madras)		Rs.
	150, goods articles, @ Rs.20		2,250
	Add: Expenses Rs.150		150
	50 damaged articles		450
			2,850
(9)	Consignment to Madras A/c Dr			3,030
	To Profit & Loss Account				3,030
(Profit on consignment transferred to Profit & Loss Account)
(10)	Goods sent on Consignment A/c			7,500
	To Trading A/c				7,500
(Goods sent on consignment A/c closed by transfer to trading Account)

Books of M. Monga (Consignee)Journal

			Dr.	Cr.
			Rs.	Rs.
(1)	D.Dogra A/c Dr		3,000
	To Bank A/c			3,000
(Advance sent to the Consignor against consignment)
(2)	D. Dogra A/c Dr		150
	To Bank A/c			150
(Expenses incurred on the Consignment on behalf of D. Dogra
	Storage	50
	Insurance	100
		150
(3)	Bank A/c Dr		8,400
	To D. Dogra A/c			8,400
(Sale of 300 articles @ Rs.28 each out of the Consignment.)
(4)	D. Dogra A/c Dr		420
	To Commission A/c			420
(5% Commission on Sales made on half of D. Dogra; 3% Commission + 2% Del Credere)
(5)	D. Dogra A/c Dr		4,830
	To Bank A/c			4,830
(Amount due to D. Dogra remitted).

Q.8). Philips Radio of Calcutta despatched 1,000 transistors at Rs.700 each to Mohan Bros. of Delhi, the consignors paid freight Rs.7,500, cartage Rs.500 and insurance Rs.2,500 Mohan Bros. received only 900 sets and incurred he following expenses. Rs.Octroi and other Expenses 1,00,000Cartage 5,000Sales expenses 6,000The consignee sold 600 sets only. You are required to calculate the value of closing stock. A8): -Calculation of value of unsold stock

Particulars	Units
Sets Received	900
Sets Sold	300
Unsold Stock	600

Particulars	Rs.
Cost of Unsold Stock (300 x 700)	2,10,000
Add: Proportionate expenses of Consignor (7500 + 500 + 2500) x 300/1000	3,150
Add: Proportionate expenses of Consignee (Octroi & Cartage) (1,00,000 + 5000) x 300/900	35,000
	2,48,150

Q.9). Deepak sold goods on behalf of Geep Sales Corporation on consignment basis. On 1 January 2002 he had with him a stock of Rs.20,000 on consignment. During the year he received goods worth Rs.2,00,000.Deepak had instructions to sell goods at cost plus 25% and was entitled to a commission of 4% on sales in addition to 1% del credere commission.During the year ended 31 December 2002 cash sales were Rs.1,20,000; credit sales Rs.1,05,000; Deepak’s expenses relating to consignment Rs.3,000 being salaries and insurance bad debts amounted to Rs.3,000.Prepare necessary accounts in the books of Geep Sales Corporation. A9): -

Solution :
In the books of Geep Sales Corporation
Consignment Account
Dr.			Cr.
	Rs.		Rs.
To Consignment Stock b/d	20,000	By Deepak
To Goods sent on Consignment Account	2,00,000	Cash Sales 1,20,000
To Deepak (Commission)	9,000	Credit Sales 1,05,000	2,25,000
To Deepak (Commission)	2,250	By Consignment Stock c/d	40,000
To Deepak (expenses)	3,000
To Profit & Loss Account
(Profit)	30,750
	2,65,000		2,65,000
Deepak’s Account
Dr.			Cr.
	Rs.		Rs.
To Consignment account (Sales)	2,25,000	By Consignment account
		(Commission)	9,000
		By Consignment Account
		(Commission)	2,250
		By Consignment Account
		(Exp.)	3,000
		By Balance c/d	2,10,750
	2,25,000		2,25,000

Working Notes:(1) Calculation of Consignment Stock Sale Price = 100 + 25 = 125Cost of Sales = Sales × 100/125= 2,25,000 × 100/125= Rs.1,80,000Cost of the goods available for sale = Rs. 20,000 + Rs. 2,00,000 = Rs.2,20,000. Hence stock at the end = Rs. 2,20,000 - Rs. 1,80,000 = Rs. 40,000(2) Since Deepak is paid del-credere commission, bad debts of Rs. 3,000 would be borne by him. Q.10). S of Bombay consigned 10,000 kg. of oil to D of Calcutta. The cost of oil was Rs.2 per kg. S paid Rs. 5,000 as freight and insurance. During transit 250 kg were accidentally destroyed for which the insurers paid directly to the consignors Rs.450 if full settlement of the claim.D reported that 7,500 kg were sold @ Rs.3 per kg. The expenses being on godown rent Rs. 200 on advertisement Rs. 1,000 and on salesman salary Rs. 2,000 D. is entitled to a commission of 3% plus 1.5% del credere. D reported a loss of 100 kg. due to leakage. D. settled the accounts by bank draft. Prepare the accounts is the books of S. A10): -

Consignment to Calcutta A/c
Dr.				Cr.
		Rs.		Rs.
To Goods on Consignment A/c		20,000	By Bank (Ins. Co.)	450
To Bank—Freight & Insurance		5,000	By P & L A/c (abnormal loss	175
To D—Expenses		3,200	By D— (Sale proceeds)	22,500
To D—Commission
Ordinary 3%	675		By Consignment Stock A/c	5,431
Del Credere 1.5%	338	1,013	By P & L A/c—Loss	657


		29,213		29,213
Goods Sent on Consignment A/c
Dr.				Cr.
		Rs.		Rs.
To Trading A/c		20,000	By Consignment to Calcutta A/c	20,000
Consignment Stock A/c
Dr.				Cr.
		Rs.		Rs.
To Consignment Calcutta A/c		5,431	By Balance c/d	5,431
D’s A/c
Dr.				Cr.
		Rs.		Rs.
To Consignment to Calcutta A/c			By Consignment to Calcutta A/c
—(sale proceeds)		22,500	(Exp.)	3,200
			By Consignment to Calcutta A/c
			(commission)	1,013
			By Bank	18,287
		22,500		22,500
Working Notes:
(A) Cost of Goods destroyed			Rs.
Cost of 10,000 kg.@Rs.2			20,000
Freight			5,000
Total cost of 10,000 kg.			25,000

(B) Value of Stock still unsold
Quantity received by D (Excluding accidental loss)			9,750
Less: Normal Leakage			(100)
			9,650
Cost of 9,650 kgs (25,000-625)			Rs. 24,375
Cost of 2,150 kgs (24,375 / 9650 x 2150)			Rs. 5,431

Q11). What is Joint Venture?A11). Joint Venture is a temporary form of business, where two or more persons join together to meet the short term objectives. It is quiet similar to Partnership firm, but established without name or registration separately under any law. Q12). Who are Co-Ventures?A12): The two or more people who start Joint Venture to achieve the short term objectives and ready to share the risk and return in the venture, are called Co-Ventures. They are similar to Partners in the Partnership firm. Q13). State any four features of Joint Venture.A13). The following are the important features of Joint Venture.

Joint is a temporary business arrangement.

It is quiet similar to the form of partnership.

Two or more people join together to meet the short term objectives.

It does not have any name or registration separately under any law.

Q14). State any two differences between Joint Venture and Partnership.A14). Joint Venture is a temporary partnership; partnership is a long term Joint Venture. The following are the differences between Joint Venture and Partnership.

BASIS

JOINT VENTURE

PARTNERSHIP FIRM

1. Name of the

Venture

Joint Venture does not have any

name of running business.

Partnership has its own name of

running business.

2. Nature of

members

Members in Joint Venture are

Co-Ventures

Members in Partnership firm

are partners

3. Nature of

objectives

Temporary / short term

objectives are set in joint venture

Long term objectives are set in

partnership firm.

4. Registration of

Firm

No registration of business under

any law

Registration is optional, but

available.

5. Books of accounts

No separate set of books are

maintained in the books of joint venture.

Separate set of books are

maintained in the books of partnership firm.

6.Freedom for additional business

Co-ventures have freedom to do similar business and complete.

Partners do not have freedom to

do similar business and complete.

8. Maintenance of separate set of

Books

Not necessary

Mandatory

9. Status of Minor

A minor cannot become a co-

venturer.

A minor can become a partner

to the benefits of the firms.

10. Governing Act

There is no such specific act.

The partnership is governed by the Indian Partnership Act,

1932.

11. Dissolution

Joint venture is dissolved as soon as its work has been completed.

Partnership is dissolved only at the mutual opinion of partners.

Q15).State any two differences between Joint Venture and Consignment.A15). the following are the important differences between Joint Venture and Consignment.

BASIS	JOINT VENTURE	CONSIGNMENT
1. Nature of parties	The parties of Joint Venture are Co-Venturers.	The parties of Consignment are Consignor and Consignee.
2. Nature of relationship between Parties	Relationship of Parties in Joint Venture are called partners	Relationships of Parties in consignment are Principal and Agent.
3.Powers to Parties	Co-venturers have full powers to purchase and sale of assets, collection of dues.	Consignee has to act like an agent to consignor and has limited power.
4. Law applicability	Partnership act is applicable to joint venture	Law of agency is applicable.
5. sharing of profits or loss	Co-ventures have right to share profit or loss of venture.	Consignor and consignee do not share the profit or loss of consignment.
6. scope of business	There is a wide scope for joint venture business. It includes different ventures.	The scope of consignment is narrow. It is concerned with the sale of movable goods.
7. Number of persons	More than two persons are possible in joint venture.	One consignor, but more than two consignees in consignment.

Q16). State the methods of accounting for Joint Venture.A16). The accounting treatment for Joint Venture has been studied under two board classifications they are.

When separate set of books are maintained for Joint Venture.

When no separate set of books are maintained for Joint Venture.

Q17). Why do you prepare Joint Venture Account?A17).It is a normal ledger account, incorporates transactions made exclusively in Joint venture to find out its profit of loss. It is maintained from the starting date of Joint venture to the date of dissolution. Q18).What is joint bank account?A18).It is similar to normal bank account. It records all expense in the credit side and all incomes in the debit side. The contribution of cash made by co-venture’s, income through sale of goods etc., are debited and expenses of joint venture, purchase of goods are credited. Q19).What is memorandum joint venture account?A19).It is not an account prepared under double entry principles of accounts. All the expenses paid by each co-ventures are debited and income (sales) made by each co-ventures are credited in the respective co-ventures name. it is prepared to find out the profit or loss of joint venture. Q20). State the feature of joint ventures.A20)

Joint venture is a temporary business arrangement

It is quiet similar to the form of partnership.

Two or more people join together to meet the short-term objectives.

It does not have any name or registration separately under any law.

The people, who are starting the joint venture and sharing the risk, return, are called co- ventures.

The profit of loss of joint venture is ascertained at the time of closing the business.

Co-ventures have unlimited liability if there is a huge loss in the venture.

All the assets are received in cash and all liabilities are paid in cash.

Joint venture is a special partnership without a firm name.

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