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CONTENTS:

  • Meaning of joint ventures
  • Features of joint ventures
  • Accounting entries

Meaning of Joint Ventures

A joint venture is simply a venture undertaken jointly by two or more persons with a view to gaining a profit. Joint venture differs from a partnership in that it is of a more temporary character. Nowadays joint ventures are often concerned with one isolated transaction, such as buying up bankrupt stocks or engaging in similar operation. In other words, joint ventures refer to the mutual advantage of two or more persons or firms to tackle a particular business venture together instead of engaging in it separately.

Features of Joint Ventures

  1. The profit sharing ratio must be clearly stated
  2. The capital, activities and scope of the ventures must be laid down
  3. Sometimes one venture is allowed credit for the use of his office, or for services provided, but this must be agreed to by all parties.

Differences between joint venture and partnership

Evaluation:

  1. Define Joint Venture
  2. Outline three features of Joint Venture
  3. Differentiate between Joint Venture and partnership

Accounting procedures

Each venturer opens an account to record all matters which concern the particular venture.

Lesson tags: Financial Accounting Lesson Notes, Financial Accounting Objective Questions, SS2 Financial Accounting, SS2 Financial Accounting Evaluation Questions, SS2 Financial Accounting Evaluation Questions Third Term, SS2 Financial Accounting Objective Questions, SS2 Financial Accounting Objective Questions Third Term, SS2 Financial Accounting Third Term
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