When expenses are paid on behalf of the venture, the accounting entries is to debit

JAMB Accounting 2023 52 views

When expenses are paid on behalf of the venture, the accounting entries is to debit

  1. bank account and credit joint venture account
  2. expenses account and credit bank account
  3. joint venture account and credit expenses account
  4. joint venture account and credit bank account ✓

Explanation

In joint ventures, all costs related to the project go to the joint venture account. When you pay expenses on behalf of the venture, debit joint venture account (increasing venture costs). Credit bank account for the payment made.

Individual expense accounts aren’t used in joint venture accounting. Everything goes through the joint venture account to keep venture transactions separate from personal business.

Remember: Joint venture account is debited for all venture-related costs and payments made.

pastquestions.ng