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When unsold stock is taken away by a co-venturer, then ______account is debited:
- a)Joint Stock
- b)Joint Venture
- c)Joint Bank Account
- d)Co-venturers capital account
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
When unsold stock is taken away by a co-venturer, then ______account i...
Co-Venturer’s Account:
This is the capital account of the venturer relating to venture. This account is credited by the capital contributed by the venturers, goods supplied by them from their own stock, expenses made personally by them etc. whereas this account is debited for any withdrawals or any asset taken from the venture.
The profit or loss so made on venture is transferred to this account in profit sharing ratio and this account is closed by cash payment from joint bank and vice versa in the opposite case.
Most Upvoted Answer
When unsold stock is taken away by a co-venturer, then ______account i...
Debiting Co-venturers Capital Account
When unsold stock is taken away by a co-venturer, it implies that the co-venturer has purchased the stock from the joint venture. As a result, the co-venturer's capital account needs to be debited, and the joint venture account needs to be credited. This transaction is recorded in the books of the joint venture.
Reasoning
The co-venturer's capital account is debited because the co-venturer has invested in the joint venture by purchasing the unsold stock. The joint venture account is credited because the unsold stock has been sold to the co-venturer, and the proceeds are recorded in the joint venture account.
Impact on Financial Statements
Debiting the co-venturer's capital account and crediting the joint venture account will impact the financial statements of the joint venture. The joint venture's profit and loss account will not be affected by this transaction since the transaction involves the transfer of unsold stock. However, the balance sheet of the joint venture will reflect the reduction in the value of unsold stock and the increase in the cash balance.
Conclusion
In conclusion, when unsold stock is taken away by a co-venturer, the co-venturer's capital account is debited, and the joint venture account is credited. This transaction is recorded in the books of the joint venture, and it impacts the balance sheet of the joint venture.
When unsold stock is taken away by a co-venturer, it implies that the co-venturer has purchased the stock from the joint venture. As a result, the co-venturer's capital account needs to be debited, and the joint venture account needs to be credited. This transaction is recorded in the books of the joint venture.
Reasoning
The co-venturer's capital account is debited because the co-venturer has invested in the joint venture by purchasing the unsold stock. The joint venture account is credited because the unsold stock has been sold to the co-venturer, and the proceeds are recorded in the joint venture account.
Impact on Financial Statements
Debiting the co-venturer's capital account and crediting the joint venture account will impact the financial statements of the joint venture. The joint venture's profit and loss account will not be affected by this transaction since the transaction involves the transfer of unsold stock. However, the balance sheet of the joint venture will reflect the reduction in the value of unsold stock and the increase in the cash balance.
Conclusion
In conclusion, when unsold stock is taken away by a co-venturer, the co-venturer's capital account is debited, and the joint venture account is credited. This transaction is recorded in the books of the joint venture, and it impacts the balance sheet of the joint venture.
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When unsold stock is taken away by a co-venturer, then ______account is debited:a)Joint Stockb)Joint Venturec)Joint Bank Accountd)Co-venturers capital accountCorrect answer is option 'D'. Can you explain this answer?
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