CA Foundation Exam > CA Foundation Questions > If any Inventories is taken over by the ventu...
Start Learning for Free
If any Inventories is taken over by the venturer, it will be treated as an:
- a)Income of the Joint venture, hence credited to Joint Venture Account
- b)Expenses of Joint Venture, hence debited to Joint Venture Account
- c)To be ignored from Joint Venture Transaction
- d)It will be treated in the personal book of the venturer and not in the books of joint Venture.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
If any Inventories is taken over by the venturer, it will be treated a...
Inventories taken over by the venturer in a joint venture are treated as income of the joint venture and credited to the Joint Venture Account.
Explanation:
In a joint venture, two or more parties come together to carry out a specific business activity for a limited period of time. Each party contributes resources and shares the profits and losses of the venture. Inventories are one of the resources that can be contributed by the parties involved.
When one of the venturers takes over inventories from the joint venture, it means that the venturer is acquiring the inventories for their own use or for sale in their own business. In this case, the inventories are removed from the joint venture and become the personal property of the venturer.
The treatment of this transaction is as follows:
1. Income of the Joint Venture: Since the inventories were originally contributed to the joint venture and formed a part of its assets, their transfer to the venturer's personal use or business is considered as a realization of the joint venture's assets. Therefore, it is treated as income of the joint venture.
2. Credited to Joint Venture Account: The income arising from the transfer of inventories is recorded in the Joint Venture Account, which is a nominal account used to record all the revenues and expenses of the joint venture. The credit entry in the Joint Venture Account represents the increase in income for the joint venture.
3. Effect on Profit Sharing: As the inventories are treated as income of the joint venture, they will be taken into consideration while determining the profits or losses to be shared among the venturers. The venturer who took over the inventories may need to share a portion of the income with the other venturers, based on the profit-sharing agreement.
It is important to note that the treatment may vary depending on the specific terms and conditions of the joint venture agreement. However, in general, when inventories are taken over by the venturer, they are treated as income of the joint venture and credited to the Joint Venture Account.
Explanation:
In a joint venture, two or more parties come together to carry out a specific business activity for a limited period of time. Each party contributes resources and shares the profits and losses of the venture. Inventories are one of the resources that can be contributed by the parties involved.
When one of the venturers takes over inventories from the joint venture, it means that the venturer is acquiring the inventories for their own use or for sale in their own business. In this case, the inventories are removed from the joint venture and become the personal property of the venturer.
The treatment of this transaction is as follows:
1. Income of the Joint Venture: Since the inventories were originally contributed to the joint venture and formed a part of its assets, their transfer to the venturer's personal use or business is considered as a realization of the joint venture's assets. Therefore, it is treated as income of the joint venture.
2. Credited to Joint Venture Account: The income arising from the transfer of inventories is recorded in the Joint Venture Account, which is a nominal account used to record all the revenues and expenses of the joint venture. The credit entry in the Joint Venture Account represents the increase in income for the joint venture.
3. Effect on Profit Sharing: As the inventories are treated as income of the joint venture, they will be taken into consideration while determining the profits or losses to be shared among the venturers. The venturer who took over the inventories may need to share a portion of the income with the other venturers, based on the profit-sharing agreement.
It is important to note that the treatment may vary depending on the specific terms and conditions of the joint venture agreement. However, in general, when inventories are taken over by the venturer, they are treated as income of the joint venture and credited to the Joint Venture Account.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer?
Question Description
If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer?.
If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer?.
Solutions for If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice If any Inventories is taken over by the venturer, it will be treated as an:a)Income of the Joint venture, hence credited to Joint Venture Accountb)Expenses of Joint Venture, hence debited to Joint Venture Accountc)To be ignored from Joint Venture Transactiond)It will be treated in the personal book of the venturer and not in the books of joint Venture.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup