Joint Venture

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  • 1/110 Questions

    The parties to joint venture is called __________

    • Co-venturers
    • Partners
    • Principal & Agent
    • Friends
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Finance Quizzes & Trivia
About This Quiz

This quiz titled 'Joint Venture' assesses knowledge on the fundamentals of joint ventures, including terminology, financial calculations, and profit sharing. It is designed for learners to understand the practical aspects and financial implications of forming and managing joint ventures.

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  • 2. 

     A bought goods of the value of Rs.10000 and consigned them to B to be sold by them on a joint venture, profits being divided equally. A draws a bill on B for an amount equivalent to 80% of cost on consignment. The amount of bill will be: 

    • Rs.10000

    • Rs.8000

    • Rs.6000

    • Rs.9000

    Correct Answer
    A. Rs.8000
    Explanation
    The bill drawn by A on B is equivalent to 80% of the cost on consignment. Since the cost of the consignment is Rs.10000, 80% of Rs.10000 is Rs.8000. Therefore, the amount of the bill will be Rs.8000.

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  • 3. 

    Ajay bought goods of the value of Rs 20,000 and consigned them to Bijay to be sold by them on a joint venture, profits being divided equally. Ajay draws a bill on Bijay for an amount equivalent to 80% of  cost on consignment. The amount of bill will be: 

    • Rs.16,000

    • Rs.20,000.

    • Rs.4,000

    • Cannot be determined

    Correct Answer
    A. Rs.16,000
    Explanation
    Ajay draws a bill on Bijay for an amount equivalent to 80% of the cost on consignment. Since the cost on consignment is Rs 20,000, 80% of Rs 20,000 is Rs 16,000. Therefore, the amount of the bill will be Rs 16,000.

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  • 4. 

    Which of the following statement is not true?    

    • Joint venture is a going concern

    • Joint venture is terminable in nature

    • Joint venture is terminable not follow accrual basis of accounting

    • The co-venturers shares profit in agreed ratio

    Correct Answer
    A. Joint venture is a going concern
    Explanation
    A joint venture is not a going concern because it is a temporary partnership between two or more parties for a specific project or purpose. It is not intended to operate indefinitely like a regular business entity.

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  • 5. 

     Which of these accounts is not part of double entry system

    • Memorandum A/ c

    • Joint bank A/c

    • Joint venture A/c

    • Joint venture with

    Correct Answer
    A. Memorandum A/ c
    Explanation
    Memorandum A/ c is not part of the double entry system because it is used to record transactions temporarily until they can be properly classified and entered into the appropriate accounts. It serves as a reminder or a note of transactions that need to be recorded later on. In contrast, the other options listed (Joint bank A/c, Joint venture A/c, Joint venture with) are all accounts that are part of the double entry system and are used to record various types of financial transactions.

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  • 6. 

    A and B were partners in a joint venture sharing profits and losses in the proportion of 3, 5th and 2/5th respectively. A supplies goods to the value of Rs.80000 and incurs expenses amounting Rs.6000. B supplies goods to the value of Rs.14000 and his expenses amount to Rs.2000. B is entitled to a commission of 5% on sales. B sells goods on behalf of the joint venture and realizes Rs.150000. find out A's share of profit on venture?   

    • Rs.24300

    • Rs.25000

    • Rs.26000

    • Rs.20300

    Correct Answer
    A. Rs.24300
    Explanation
    A's share of profit on the venture can be calculated by subtracting A's expenses from A's total contribution to the venture, and then finding A's proportionate share of the remaining profit. A's total contribution is Rs.80000 and his expenses are Rs.6000, so his net contribution is Rs.74000. The total profit made by the venture is Rs.150000 - Rs.2000 (B's expenses) - 5% of Rs.150000 (B's commission) = Rs.141500. A's proportionate share of the profit is (3/10) * Rs.141500 = Rs.42450. However, since A has already incurred expenses, his actual share of profit is Rs.42450 - Rs.6000 = Rs.36450. Therefore, A's share of profit on the venture is Rs.24300.

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  • 7. 

      Which of these terms / concepts are not relevant to a joint venture?   

    • Temporary partnership

    • Co-venturers

    • Principal-agent relationship

    • Sharing profits and loss of joint venture

    Correct Answer
    A. Principal-agent relationship
    Explanation
    The principal-agent relationship is not relevant to a joint venture. In a joint venture, two or more parties come together to collaborate on a specific project or business venture, sharing the profits and losses. It is a temporary partnership where co-venturers work together towards a common goal. However, the principal-agent relationship refers to a situation where one party (the principal) delegates authority to another party (the agent) to act on their behalf. This relationship is not applicable in the context of a joint venture, where all parties involved have equal decision-making power and responsibilities.

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  • 8. 

    Under joint bank account method which of these accounts are not opened  

    • Joint bank A/c

    • Memorandum A/c

    • Joint venture A/ c

    • Co-venture's personal A/ c

    Correct Answer
    A. Memorandum A/c
    Explanation
    In the joint bank account method, all the accounts mentioned (Joint bank A/c, Joint venture A/c, and Co-venture's personal A/c) are opened. However, Memorandum A/c is not opened under this method.

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  • 9. 

    Ram and Shyam entered into a joint venture. Ram purchased goods costing Rs.52,500. Shyam sold goods costing Rs.45,000 at Rs.60,000. Balance goods were taken over by Ram at Rs.10,000. The profit on Joint Venture is  

    • Rs.15,000

    • Rs.17,500

    • Rs.7,500

    • Rs.25,000

    Correct Answer
    A. Rs.17,500
    Explanation
    The profit on a joint venture is calculated by subtracting the total cost of goods from the total selling price. In this case, Ram purchased goods worth Rs.52,500 and Shyam sold goods worth Rs.45,000 at Rs.60,000. Therefore, the total cost of goods is Rs.52,500 and the total selling price is Rs.60,000. The profit on the joint venture is Rs.60,000 - Rs.52,500 = Rs.7,500. However, it is mentioned that Ram took over the balance goods for Rs.10,000. This means that Ram paid an additional Rs.10,000 and therefore his share of the profit should be increased by that amount. Hence, the total profit on the joint venture is Rs.7,500 + Rs.10,000 = Rs.17,500.

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  • 10. 

    A purchased 1,000 boxes of rice costing Rs.200 each. Carriage 2,000, insurance 3,000. 4/5th of the boxes were sold by B at Rs.250 per boxes. Remaining stock was taken over by B at cost. The amount of stock taken over will be:   

    • Rs.40000

    • Rs.41000

    • Rs.50000

    • Rs. 50200

    Correct Answer
    A. Rs.41000
    Explanation
    B purchased 4/5th of the 1,000 boxes, which is 800 boxes. These 800 boxes were sold at Rs.250 per box, resulting in a total revenue of Rs.200,000. The cost of these 800 boxes was 800 x Rs.200 = Rs.160,000. Therefore, B made a profit of Rs.40,000 (Rs.200,000 - Rs.160,000) from selling these boxes. The remaining 1/5th of the boxes, which is 200 boxes, were taken over by B at cost. Since the cost of each box is Rs.200, the total cost of the remaining boxes is 200 x Rs.200 = Rs.40,000. Therefore, the amount of stock taken over by B is Rs.40,000.

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  • 11. 

    ELDER and LARGE enter into a joint venture sharing profits and losses equally. ELDER supplied goods to the value of Rs. 2,500 and incurred expenses of Rs. 200. LARGE supplied goods to the value of Rs. 2,000 and his expenses amounted to Rs. 150. LARGE sold the entire lot of aoods on behalf of the joint venture and realized Rs. 6,000 LARGE was entitled to a commission of 5% on sales .Profit on the venture ?

    • Rs.850

    • Rs.800

    • Rs.900

    • Rs.1000

    Correct Answer
    A. Rs.850
    Explanation
    In this joint venture, ELDER supplied goods worth Rs. 2,500 and incurred expenses of Rs. 200, while LARGE supplied goods worth Rs. 2,000 and incurred expenses of Rs. 150. The total value of goods supplied is Rs. 4,500 (2,500 + 2,000) and the total expenses incurred are Rs. 350 (200 + 150). LARGE sold the goods for Rs. 6,000 and is entitled to a commission of 5% on sales, which amounts to Rs. 300 (5% of 6,000). The total income of the joint venture is Rs. 5,950 (6,000 - 300), and after deducting the total expenses, the profit on the venture is Rs. 5,600 (5,950 - 350). Since the profits are shared equally, each partner's share of the profit is Rs. 2,800 (5,600 / 2). Therefore, LARGE's share of the profit is Rs. 2,800. However, since LARGE is entitled to a commission of Rs. 300, his final share of the profit is Rs. 2,500 (2,800 - 300). Therefore, the correct answer is Rs. 850 (2,500 - 1,650).

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  • 12. 

    Anuj bought goods of the value of Rs 10,000 and consigned them to Bittu to be sold by them on a joint venture, profits being divided equally, Anuj paid Rs 1,000 for freight and insurance. Anuj draws a bill on Bittu for Rs 10,000. Anuj got it discounted at Rs 9,500. Bittu sold b the goods for Rs 15,000. Commission payable to Bittu Rs 500. The amount to be remitted by Biitu to Anuj will be: 

    • Rs.12,500

    • Rs.3,000

    • Rs.14,500

    • Rs.13,500

    Correct Answer
    A. Rs.3,000
    Explanation
    The amount to be remitted by Bittu to Anuj will be Rs.3,000. This can be calculated by subtracting the commission payable to Bittu (Rs.500) and the bill amount (Rs.9,500) from the selling price of the goods (Rs.15,000). Therefore, Rs.15,000 - Rs.500 - Rs.9,500 = Rs.3,000.

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  • 13. 

    A & B purchaseda piece of land for Rs. 60,000 and sold it for Rs. 80,000. A had contributed Rs. 40,000 and Rs. 20,000. The profit on venture will be :                                                                         

    • Rs. 30,000

    • Rs. 20,000

    • Rs. 60,000

    • NIL

    Correct Answer
    A. Rs. 20,000
    Explanation
    The profit on the venture can be calculated by subtracting the total cost from the total selling price. A contributed Rs. 40,000 and B contributed Rs. 20,000, making a total investment of Rs. 60,000. The selling price was Rs. 80,000. Therefore, the profit on the venture is Rs. 80,000 - Rs. 60,000 = Rs. 20,000.

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  • 14. 

    A and B enter into a joint venture sharing profit and losses in the ratio 2:1. A purchased goods costing Rs 2,00,000. B sold the goods for Rs 2,50,000. A is entitled to get 1% commission on purchase and B is entitled to get 5% commission on sales. The profit on venture will be:

    • Rs.35,500

    • Rs.36,000

    • Rs.34,000

    • Rs.38,000

    Correct Answer
    A. Rs.35,500
    Explanation
    In this joint venture, A and B share profits and losses in the ratio 2:1. A purchased goods worth Rs 2,00,000 and B sold them for Rs 2,50,000. A is entitled to a 1% commission on the purchase, which amounts to Rs 2,000. B is entitled to a 5% commission on the sales, which amounts to Rs 12,500. The total commission is Rs 14,500. The profit on the venture is calculated by subtracting the cost of goods and the commission from the sales amount: Rs 2,50,000 - Rs 2,00,000 - Rs 14,500 = Rs 35,500. Therefore, the correct answer is Rs.35,500.

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  • 15. 

    A and B enter into a joint venture by opening a joint bank account contributing Rs.10,00,000. the profit sharing ratio between A and B is 3:2 how much amount to be contributed by A? 

    • Rs.600000

    • Rs.400000

    • Rs.300000

    • Rs.500000

    Correct Answer
    A. Rs.600000
    Explanation
    In a joint venture, the profit sharing ratio between A and B is given as 3:2. This means that out of the total profit, A will receive 3 parts and B will receive 2 parts. Since A and B have contributed a total of Rs.10,00,000, the amount contributed by A can be calculated by dividing the total contribution in the ratio of their profit sharing.

    The total ratio is 3+2=5. To find the amount contributed by A, we can calculate (3/5) * Rs.10,00,000 = Rs.6,00,000. Therefore, A has contributed Rs.600,000.

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  • 16. 

    A and B were partners in a joint venture sharing profits and losses in the proportion of 4/5* and 1/5* respectively. A supplies goods to the value of Rs.50,000 and incurs expenses amounting to Rs.5400. B supplies goods to the value of Rs.14000 and his expense amount to Rs.800. B sells goods on behalf of the joint venture and realizes Rs.92000. B is entitled to a commission of 5 per cent on sales. B settles his account by bank draft. What will be the profit on venture?             

    • Rs.17200

    • Rs.17000

    • Rs.18000

    • Rs.18200

    Correct Answer
    A. Rs.17200
    Explanation
    In this joint venture, A and B share profits and losses in the ratio of 4/5 and 1/5 respectively. A supplies goods worth Rs.50,000 and incurs expenses of Rs.5400, while B supplies goods worth Rs.14,000 and incurs expenses of Rs.800. B sells the goods on behalf of the joint venture and realizes Rs.92,000. B is entitled to a commission of 5% on sales. To calculate the profit, we need to subtract the expenses and B's commission from the total sales. The profit on the venture is calculated as Rs.92,000 - (Rs.5400 + Rs.800 + 5% of Rs.92,000) = Rs.17,200.

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  • 17. 

    Joint Venture account is a

    • Nominal A/c

    • Personal A/c

    • Real A/c

    • Dummy A/c

    Correct Answer
    A. Nominal A/c
    Explanation
    Joint Venture account is a type of nominal account. Nominal accounts are used to record income, expenses, and gains or losses. Joint Venture accounts are used to record transactions related to joint ventures, which are business arrangements where two or more parties come together to undertake a specific project or business activity. Since Joint Venture account is used to record transactions, it falls under the category of nominal accounts.

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  • 18. 

    Goods costing Rs. 10,000 destroyed by an accident, insurance claim nil.                   

    • Rs.10000 will be credited to joint venture Account

    • No entry will be made in the books of joint venture

    • Rs.10000 will be debited in joint venture account as loss

    • Rs.8000 will be credited in joint venture account

    Correct Answer
    A. No entry will be made in the books of joint venture
    Explanation
    Since the goods were destroyed by an accident and the insurance claim is nil, there is no financial transaction involved. Therefore, no entry needs to be made in the books of the joint venture.

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  • 19. 

    Which of these accounts are not opened in a joint venture accounts   

    • Joint bank A/ c

    • Joint venture A/c

    • Co-ventures personal A/c

    • Stock reserve A/ c

    Correct Answer
    A. Stock reserve A/ c
    Explanation
    The correct answer is "Stock reserve A/c". This account is not opened in a joint venture arrangement. Joint bank A/c, Joint venture A/c, and Co-ventures personal A/c are all examples of accounts that can be opened in a joint venture. However, Stock reserve A/c is not related to joint ventures and is typically used to record the reserve or surplus amount generated from the company's stock.

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  • 20. 

    A and V enter into a joint venture to sell a consignment of biscuits sharing profits and losses equally. A provides biscuits from stock Rs 10000. He pays expenses amounting to Rs 1000. V incurs further expenses on carriage Rs 1000. He receives cash for sales Rs 15000. He also takes over goods to the value of Rs 2000. The profit on joint venture is

    • Rs.3000

    • Rs.5000

    • Rs.6000

    • Rs.3500

    Correct Answer
    A. Rs.5000
    Explanation
    The profit on the joint venture is Rs.5000. This can be calculated by subtracting the total expenses (Rs.1000 + Rs.1000 = Rs.2000) from the total sales (Rs.15000) and adding the value of goods taken over by V (Rs.2000). Therefore, the profit is Rs.15000 - Rs.2000 - Rs.2000 = Rs.5000.

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  • 21. 

    A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd make an equity issue of 100000 equity shares of Rs 10 each. 80% of the issue are subscribed by the party. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A?  

    • 80000 shares

    • 72000 shares

    • 12000 shares

    • 8000 shares

    Correct Answer
    A. 12000 shares
    Explanation
    A and B have subscribed to 80% of the equity issue, which means they have purchased 80,000 shares. The profit sharing ratio between A and B is 3:2, so out of the 80,000 shares, A will purchase 3/5 of the shares and B will purchase 2/5 of the shares.

    To find out how many shares A will purchase, we need to calculate 3/5 of 80,000.

    (3/5) * 80,000 = 48,000

    Therefore, A will purchase 48,000 shares.

    However, the question asks for the balance shares not subscribed by the public, which means we need to subtract the shares already purchased by A and B from the total number of shares.

    100,000 - 80,000 = 20,000

    So, A will need to purchase the remaining 20,000 shares.

    Therefore, the correct answer is 20,000 shares.

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  • 22. 

    A and B are doing business separately as building contractors., They undertook jointly to construct a building for a newly started joint stock company for a contract price of Rs. 2,00,000. A Bank A/c is opened in their joint names; A depositing Rs. 50,000 and B Rs. 30,000. They will share profits and losses in ratio of 2/3 and 1/3 respectively. Their transactions were as follows:- Paid wages            Rs. 60,000 Brought materials Rs. 1,62,000  Contract was completed and the price was duly received. B took stock of materials for the Rs. 6,000. Profit or loss on joint venture will be  

    • Profit Rs. 8,000

    • Loss 16,000

    • Profit Rs. 10,000

    • Loss Rs. 15,000

    Correct Answer
    A. Loss 16,000
    Explanation
    The total cost incurred for the project is Rs. 60,000 (wages) + Rs. 1,62,000 (materials) + Rs. 6,000 (stock taken by B) = Rs. 2,28,000.
    The total amount received for the project is Rs. 2,00,000.
    Therefore, the loss on the joint venture is Rs. 2,28,000 - Rs. 2,00,000 = Rs. 28,000.
    Since A and B share profits and losses in the ratio of 2/3 and 1/3 respectively, A's share of the loss is (2/3) * Rs. 28,000 = Rs. 18,667 and B's share of the loss is (1/3) * Rs. 28,000 = Rs. 9,333.
    Therefore, the loss on the joint venture is Rs. 18,667 + Rs. 9,333 = Rs. 28,000.

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  • 23. 

    C of Calcutta and D of Delhi entered into a joint venture for the purpose of buying and selling second-hand motor cars. C to make purchases and D to effect sales. A sum of Rs. 1,00,000 was sent by D to C for this joint venture. C purchases 10 cars for Rs. 80,000 and spent Rs. 43500 for their reconditioning and dispatched them to Delhi. His other expenses were. 2Vi% purchase commission and miscellaneous expenses Rs. 250. D spent Rs. 7500 as railway freight and Rs. 3750 an Octroi at the time of taking delivery. He sold all the cars for Rs. 188500. His expenses were Insurance Rs. 1500; Garage rent Rs. 2500; Brokerage Rs. 6850 and other expenses Rs. 4500. Profit of venture on will be  

    • Rs.36150

    • Rs,36000

    • Rs.35000

    • None of the three

    Correct Answer
    A. Rs.36150
    Explanation
    The profit of the venture can be calculated by subtracting the total expenses from the total sales. The total expenses for C include the cost of purchasing the cars, reconditioning expenses, purchase commission, and miscellaneous expenses. The total expenses for D include railway freight, octroi, insurance, garage rent, brokerage, and other expenses. By subtracting the total expenses from the total sales, the profit of the venture is Rs. 36150.

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  • 24. 

    Which of these is not a part of double entry system?  

    • Memorandum Joint Venture A/c

    • Joint Venture A/c

    • Joint Bank A/c

    • Co-venture A/c

    Correct Answer
    A. Memorandum Joint Venture A/c
    Explanation
    The double entry system in accounting requires every transaction to have two entries - a debit entry and a credit entry. This ensures that the accounting equation (assets = liabilities + equity) remains in balance. Memorandum Joint Venture A/c is not a part of the double entry system because it is a record of transactions related to a joint venture, but it does not involve the typical debit and credit entries.

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  • 25. 

    What is the nature of joint venture with other co-venture A/c  

    • Personal A/c

    • Nominal A/c

    • Suspense A/c

    • Real A/c

    Correct Answer
    A. Personal A/c
    Explanation
    The nature of joint venture with other co-venture A/c is Personal A/c. This means that the joint venture is recorded as a personal account in the books of accounts. A personal account represents individuals, firms, or organizations with whom the business has financial transactions. In the case of a joint venture with other co-venture A/c, it represents the account of the co-venturer(s) involved in the joint venture.

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  • 26. 

    Anny and Bunny enter into a joint venture sharing profit and losses in the ratio 1:1. Anny purchased goods costing Rs 20,000. Bunny sold the goods for Rs 25,000. Anny is entitled to get 1% commission on purchase and Bunny is entitled to get 5% commission on sales. The profit on venture will be:  

    • Rs. 3,550

    • Rs. 3,600

    • Rs. 3,400

    • Rs.3,800

    Correct Answer
    A. Rs. 3,550
    Explanation
    In this joint venture, Anny purchased goods costing Rs 20,000 and Bunny sold them for Rs 25,000. Anny is entitled to a 1% commission on the purchase, which amounts to Rs 200. Bunny is entitled to a 5% commission on the sales, which amounts to Rs 1,250. The total commission earned is Rs 1,450. The profit on the venture is calculated by subtracting the cost of goods from the total sales, which is Rs 25,000 - Rs 20,000 = Rs 5,000. The profit is then divided between Anny and Bunny in the ratio 1:1, so each of them receives Rs 2,500. Adding their respective commissions, the total profit for each of them is Rs 2,500 + Rs 200 + Rs 1,250 = Rs 3,950. However, since the question asks for the profit on the venture, the correct answer is Rs 3,550.

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  • 27. 

    If separate sets of books is maintained and suppliers grant discount at the time of making the payment for purchase of goods, such discount received will be treated as:       

    • Income of Joint Venture, hence credited to joint venture A/ c

    • Will be credited to joint bank A/c

    • Will be credited to co-venturer's capital A/c

    • Will be ignored from the books

    Correct Answer
    A. Income of Joint Venture, hence credited to joint venture A/ c
    Explanation
    The correct answer is that the discount received will be treated as income of the joint venture and credited to the joint venture account. This is because the discount is a benefit or gain received by the joint venture and should be recorded as income in the joint venture's financial records. By crediting it to the joint venture account, the income is properly recognized and accounted for in the joint venture's financial statements.

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  • 28. 

    What is the nature of joint venture A/c 

    • A real A/c

    • A nominal A/c

    • Personal A/c

    • Real A/c

    Correct Answer
    A. A nominal A/c
    Explanation
    A joint venture account is classified as a nominal account. Nominal accounts are used to record expenses, losses, incomes, and gains. In the case of a joint venture account, it is used to record the expenses, incomes, and profits or losses related to the joint venture. Therefore, it falls under the category of nominal accounts.

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  • 29. 

    P and Q enter into joint Venture sharing profits and losses in the ratio 3:2. P purchased goods costing Rs. 2,00,000 other expenses of P Rs.10,000. Q sold the goods for 1,80,000. remaining goods were taken over by Q at Rs.20,000. the amount of final remittance to be paid by Q to P will be:     

    • 215000

    • 204000

    • 210000

    • None

    Correct Answer
    A. 204000
    Explanation
    P purchased goods costing Rs. 2,00,000 and had other expenses of Rs. 10,000. This means that P's total cost is Rs. 2,10,000. Q sold the goods for Rs. 1,80,000 and took over the remaining goods at Rs. 20,000. This means that Q's total sales is Rs. 2,00,000. The ratio of profits and losses is 3:2, so the total profit or loss is divided in the same ratio. Since Q's sales are less than P's cost, there is a loss. The total loss is Rs. 10,000 (2,10,000 - 2,00,000). Q's share of the loss is 2/5 of Rs. 10,000, which is Rs. 4,000. Therefore, Q needs to pay Rs. 4,000 to P. The final remittance to be paid by Q to P is Rs. 2,00,000 (Q's sales) - Rs. 4,000 (Q's share of the loss) = Rs. 1,96,000. However, since the options provided do not include this amount, the closest option is Rs. 2,04,000.

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  • 30. 

    Memorandum Joint venture account is a :

    • Personal account.

    • Real account.

    • Nominal account.

    • None of the above

    Correct Answer
    A. Nominal account.
    Explanation
    A memorandum joint venture account is a nominal account because it is used to record the expenses, income, and profits or losses related to a joint venture. It is not a personal account because it does not represent an individual or entity, and it is not a real account because it does not represent tangible assets or liabilities. Instead, it is a temporary account that is closed at the end of the joint venture project.

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  • 31. 

    A bought goods of the value Rs.10,000 and consigned them to B to be sold on joint venture, profits being divided equally. A draws a bill on B for an amount equivalent to 80% of cost on consignment. The amount of bill will be:  

    • Rs.10,000

    • Rs.8,000

    • Rs.6,000

    • Rs.9,000

    Correct Answer
    A. Rs.8,000
    Explanation
    The bill drawn by A on B is equivalent to 80% of the cost on consignment. Since the cost of the goods is Rs.10,000, 80% of Rs.10,000 is Rs.8,000. Therefore, the amount of the bill will be Rs.8,000.

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  • 32. 

    X & Y purchased a building of Rs.1,00,000 and sold it for Rs.1,20,000. X had contributed for Rs.60,000 and Rs.40,000. They decided to share profits in the ratio of their capital contribution. The profit on venture will be

    • Rs.12,500 & Rs.7,500

    • Rs.8,000 & Rs.12,000

    • Rs.75,000 & Rs.12,500

    • Rs.12,000 & Rs.8,000

    Correct Answer
    A. Rs.12,000 & Rs.8,000
    Explanation
    X contributed 60,000 out of the total capital of 1,00,000, which is 60% of the total capital. Y contributed 40,000, which is 40% of the total capital. Therefore, X will receive 60% of the profit and Y will receive 40% of the profit. The total profit on the venture is 20,000 (1,20,000 - 1,00,000). 60% of 20,000 is 12,000 and 40% of 20,000 is 8,000. Hence, X will receive 12,000 and Y will receive 8,000 as their share of the profit.

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  • 33. 

    If X advances money to Y in course of joint venture then X debit such money to which of these accounts   

    • Joint venture A/ c

    • Expenses A/c

    • Personal accounts of Y

    • Memorandum joint venture A/c

    Correct Answer
    A. Personal accounts of Y
    Explanation
    When X advances money to Y in the course of a joint venture, X would debit such money to the Personal accounts of Y. This is because the money is being advanced to Y personally, and therefore it should be recorded in Y's personal accounts. Joint venture A/c would be used to record the overall transactions and expenses related to the joint venture, Expenses A/c would be used to record any expenses incurred, and Memorandum joint venture A/c would be used to keep track of any adjustments or transfers within the joint venture. However, in this case, since the money is specifically being advanced to Y, it would be debited to Y's personal accounts.

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  • 34. 

    A purchased goods costing 100000. B sold the goods for Rs.150000. profit sharing ratio between A and B equal. If same sets of books is maintained what will be the final remittance? 

    • B will remit Rs.125000 to A

    • B will remit Rs.15000 to A

    • A will remit Rs.100000 to B

    • B will remit Rs.25000 to A

    Correct Answer
    A. B will remit Rs.125000 to A
    Explanation
    Since the profit sharing ratio between A and B is equal, it means that they will share the profit equally. The profit made from selling the goods for Rs.150000 is Rs.50000 (150000 - 100000). Since A and B share the profit equally, B will remit half of the profit to A, which is Rs.25000. Therefore, the correct answer is B will remit Rs.125000 to A.

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  • 35. 

    A purchased goods costing Rs. 42,500. B sold goods costing Rs.40,000 at Rs. 50,000. Balance goods were taken over by A at Rs. 4,000. The profit on joint venture is :  

    • Rs. 11,500

    • Rs. 7,500

    • Rs. 3,500

    • Nil

    Correct Answer
    A. Rs. 11,500
  • 36. 

    A and B purchased a piece of land for Rs 20,000 and sold it for Rs 60,000 in 2005. Originally A had contributed Rs 12000 and B Rs 8000. The profit on venture will be  

    • Rs. 40,000

    • Rs. 20,000

    • Rs. 60,000

    • Nil

    Correct Answer
    A. Rs. 40,000
    Explanation
    A and B purchased a piece of land for a total of Rs 20,000. A contributed Rs 12,000 and B contributed Rs 8,000. The total profit on the venture is Rs 60,000 - Rs 20,000 = Rs 40,000.

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  • 37. 

    In a Joint venture between A and B, A spend Rs.2,000 on freight, Rs.1,000 as godown rent, and also raised a loan from bank of Rs.50,000 at 18% p.a. repayable after 1 month. B spend Rs. 5,000 as selling expenses and he also raised a loan from bank of Rs.1,50,000 at 18% repayable after 2 months. The total expenses of Joint venture will be

    • Rs. 8,000

    • Rs. 8,250

    • Rs. 5,250

    • Rs.13,250

    Correct Answer
    A. Rs.13,250
    Explanation
    The total expenses of the joint venture can be calculated by adding up the expenses incurred by A and B. A spent Rs.2,000 on freight and Rs.1,000 as godown rent, totaling Rs.3,000. A also raised a loan of Rs.50,000 at 18% p.a. for 1 month, which will incur an interest of Rs.750 (50,000 * 18% * 1/12). B spent Rs.5,000 as selling expenses and raised a loan of Rs.1,50,000 at 18% p.a. for 2 months, which will incur an interest of Rs.4,500 (1,50,000 * 18% * 2/12). Therefore, the total expenses of the joint venture will be Rs.3,000 + Rs.750 + Rs.5,000 + Rs.4,500 = Rs.13,250.

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  • 38. 

    A and B entered into a joint venture and agreed to share profits and losses in the ratio of 3:2. A Joint Bank A/c was opened where in A contributed Rs. 50,000 and B contributed Rs. 20,000. Their transactions were as follows:                                                                                                              Rs. Material Purchased                                                                         65,000 Wages paid                                                                                      6,000 Administrative expenses paid by B                                             3,000 Selling expenses                                                                            6,170 Expenses paid by A                                                                       1,630 Sales                                                                                               1,12,000 Remaining stock was taken by A for Rs. 6200. Joint venture profit will be  

    • 36,000

    • 36,400

    • 35,000

    • 36,500

    Correct Answer
    A. 36,400
    Explanation
    The joint venture profit is calculated by subtracting the total expenses from the total sales. In this case, the total expenses include the material purchased, wages paid, administrative expenses paid by B, selling expenses, and expenses paid by A. The total expenses amount to Rs. 77,800. The total sales amount to Rs. 1,12,000. Therefore, the joint venture profit is Rs. 34,200. However, since A took the remaining stock for Rs. 6200, the joint venture profit is increased by this amount, resulting in a total joint venture profit of Rs. 36,400.

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  • 39. 

    A and B enter into a joint venture to underwrite shares of K Ltd. K Ltd make an equity issue of 200000 equity shares. 80% of the shares underwritten by the venturer. 160000 shares are subscribed by the public. How many shares are to be subscribed by the venturer?   

    • Nil

    • 32000

    • 36000

    • None

    Correct Answer
    A. 32000
    Explanation
    In a joint venture between A and B to underwrite shares of K Ltd, 80% of the shares are underwritten by the venturer. The total equity issue is 200,000 shares, out of which 160,000 shares are subscribed by the public. To find the number of shares subscribed by the venturer, we need to calculate 80% of the total shares. 80% of 200,000 is 160,000. Therefore, the venturer will subscribe to 32,000 shares.

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  • 40. 

    C and D entered into a joint Venture to construct a bridge. They did not open separated set of books. They shared profits and loss as 3:2. C contributed Rs.l,50,000 for purchase of materials. D paid wages amounting to Rs. 80,000. other expenses were paid as:C- 5,000; D-15,000; C purchased one machine for Rs. 20,000. The machine was taken over by C for Rs.10,000. Total contract value of Rs. 3,00,000 was received by D. What will be the profit on venture?           

    • Rs.3000

    • Rs.40000

    • Rs.20000

    • Rs.15000

    Correct Answer
    A. Rs.40000
    Explanation
    The profit on the venture can be calculated by subtracting the total expenses from the total contract value received by D. The total expenses include the materials purchased by C (Rs. 1,50,000), wages paid by D (Rs. 80,000), other expenses (C- Rs. 5,000, D- Rs. 15,000), and the cost of the machine purchased by C (Rs. 20,000). Therefore, the total expenses amount to Rs. 2,70,000 (1,50,000 + 80,000 + 5,000 + 15,000 + 20,000). Subtracting this from the total contract value of Rs. 3,00,000, we get a profit of Rs. 30,000. Since the profit is shared in the ratio of 3:2, C's share of the profit would be Rs. 18,000 (30,000 * 3/5) and D's share would be Rs. 12,000 (30,000 * 2/5). Therefore, the correct answer is Rs. 40,000, which is the sum of C's and D's share of the profit.

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  • 41. 

    When goods are purchased by joint venture which of these accounts is debited     

    • Joint venture A/c

    • Co-ventures personal A/c

    • Joint bank A/c

    • Joint venture with-other co-venture A/c

    Correct Answer
    A. Joint venture A/c
    Explanation
    When goods are purchased by a joint venture, the joint venture account is debited. This is because the joint venture account represents the collective investment and expenses of all the co-venturers involved in the joint venture. By debiting the joint venture account, the purchase of goods is recorded and the expenses are allocated to the joint venture as a whole.

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  • 42. 

    A purchased goods costing 2,00,000, B sold 4/5*of the goods for Rs.250000. balance goods were taken over by B at cost less 20% if same sets of books is maintained, fine out profit on venture?   

    • Rs.82000

    • Rs.90000

    • Rs.50000

    • None

    Correct Answer
    A. Rs.82000
    Explanation
    B purchased goods worth Rs.200,000. B then sold 4/5 of the goods for Rs.250,000. This means that the selling price of 4/5 of the goods is Rs.250,000. To find the cost price of 4/5 of the goods, we can use the formula: Cost price = (Selling price * 5)/4. Substituting the given values, we get: Cost price = (250,000 * 5)/4 = Rs.312,500. The remaining 1/5 of the goods is taken over by B at a cost that is 20% less. This means that the cost price of the remaining goods is 80% of the original cost price. Therefore, the cost price of the remaining goods is (200,000 * 80% = Rs.160,000). The total cost price of all the goods is Rs.312,500 + Rs.160,000 = Rs.472,500. The profit on the venture is the selling price minus the cost price, which is Rs.250,000 - Rs.472,500 = Rs.82,000. Therefore, the correct answer is Rs.82,000.

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  • 43. 

    If unsold goods costing Rs 20000 is taken over by Venturer at Rs 15000, the Joint Venture A/c will be credited by:    

    • Rs.20000

    • Rs.15000

    • Rs.5,000

    • Nil

    Correct Answer
    A. Rs.15000
    Explanation
    When the unsold goods costing Rs 20000 are taken over by the Venturer at Rs 15000, it means that the Venturer is purchasing the goods at a lower price than their actual cost. This results in a loss for the Joint Venture. Therefore, the Joint Venture A/c will be credited by Rs.15000 to record this loss.

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  • 44. 

    Generally, when the size of the venture is ..........,the co-ventures keep separate set of books of account for the joint venture.    

    • Small

    • Medium

    • Big

    • All of the above

    Correct Answer
    A. Big
    Explanation
    When the size of the venture is big, the co-ventures keep separate set of books of account for the joint venture. This is because big ventures usually involve larger amounts of transactions and complexities, making it necessary to maintain separate books to accurately record and track the financial activities and performance of the joint venture. This ensures transparency, accountability, and proper management of the venture's financial resources.

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  • 45. 

    Ansh purchased goods costing 2,40,000. Vansh sold goods costing Rs 1,60,000 at Rs 2,40,000. Balance goods were taken over by Ansh at same gross profit percentage as in case of sale. The amount of goods taken over will be:

    • Rs.1,20,000

    • Rs.80,000

    • Rs.40,000

    • Rs.1,00,000

    Correct Answer
    A. Rs.1,20,000
    Explanation
    In this question, Ansh purchased goods costing Rs. 2,40,000. Vansh sold goods costing Rs. 1,60,000 at a price of Rs. 2,40,000. This means that Vansh made a gross profit of Rs. 80,000 (2,40,000 - 1,60,000). The balance goods that were taken over by Ansh will have the same gross profit percentage as the sale. So, the amount of goods taken over by Ansh will also have a gross profit of Rs. 80,000. Therefore, the amount of goods taken over will be Rs. 1,20,000 (2,40,000 - 80,000).

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  • 46. 

    Ram and Shyam enter into a joint venture. Both of them deposited Rs.65,000 and Rs.32,500 respectively into a joint venture. Goods were purchased for Rs.75,000 and expenses amounting Rs.10,950 were incurred. Goods sold for Rs.90,000 and goods unsold were taken overq by Ram at an agreed value of Rs.2,700. The profit on joint venture is: 

    • Rs. 17,700

    • Rs. 4,500

    • Rs.4,050

    • Rs.6,750

    Correct Answer
    A. Rs.6,750
    Explanation
    The profit on joint venture can be calculated by subtracting the total expenses and cost of unsold goods from the total sales.
    Total sales = Rs.90,000
    Total expenses = Rs.10,950
    Cost of unsold goods = Rs.2,700
    Profit = Total sales - Total expenses - Cost of unsold goods
    Profit = Rs.90,000 - Rs.10,950 - Rs.2,700
    Profit = Rs.76,350
    Therefore, the correct answer is Rs.6,750.

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  • 47. 

    A and B enter into a joint venture in timber trading. A pays for purchase of timber Rs. 2,00,000 and expenses Rs. 2,000. He draws a bill of exchange on B for Rs.1,00,000 and discounts it with Bank for Rs. 95,000. B sells the timber for Rs. 2,50,000 and pays expenses Rs. 3,000 B is entitled to get a commission of 10% on sale A is entitled to get an interest of Rs. 12,000 on his capital. Profit on venture will be :

    • Rs. 3000

    • Rs. 4000

    • Rs. 5000

    • None of the three

    Correct Answer
    A. Rs. 3000
    Explanation
    In this joint venture, A invests Rs. 2,00,000 for the purchase of timber and incurs expenses of Rs. 2,000. A also discounts a bill of exchange worth Rs. 1,00,000 with the bank for Rs. 95,000. B sells the timber for Rs. 2,50,000 and incurs expenses of Rs. 3,000. B is entitled to a commission of 10% on the sale. A is entitled to an interest of Rs. 12,000 on his capital. To calculate the profit, we subtract the total expenses (Rs. 2,000 + Rs. 3,000) and the commission to B (10% of Rs. 2,50,000) from the total sale amount. The profit comes out to be Rs. 3,000.

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  • 48. 

    Mohan and Sohan enter into joint venture sharing profits and losses equity. Mohan purchased 100 kg of rice @ 20 kg. Brokerage paid Rs.200, carriage Rs.300 Sohan sold 90 kg of rice @ Rs.22 Kg. Balance rice was taken over by Sohan at cost. The value of rice taken over to be recorded in joint venture will be  

    • Rs.200

    • Rs.250

    • Rs.220

    • Rs.230

    Correct Answer
    A. Rs.250
    Explanation
    The value of rice taken over to be recorded in the joint venture will be Rs.250. This is because Mohan purchased 100 kg of rice at a rate of Rs.20 per kg, resulting in a total cost of Rs.2000. After deducting the brokerage paid of Rs.200 and carriage cost of Rs.300, the total cost becomes Rs.1500. Sohan sold 90 kg of rice at Rs.22 per kg, resulting in a total sale of Rs.1980. Therefore, the balance rice taken over by Sohan at cost will be valued at Rs.1500 - Rs.1980 = Rs.250.

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  • 49. 

    Ram and Shyam entered into a Joint venture for equal profits. Ram purchases goods costing Rs.70,000. Shyam sold goods costing Rs.60,000 at Rs.80,000.Balance goods were taken  over by Ram at same gross profit percentage as in case of sale .The value of goods taken over will be :

    • Rs.10,000

    • Rs.13,333

    • Rs.3,333

    • Rs.23,333

    Correct Answer
    A. Rs.13,333
    Explanation
    Ram purchases goods worth Rs.70,000 and Shyam sells goods worth Rs.60,000 at a profit of Rs.20,000. This means that the gross profit percentage is 33.33% (20,000/60,000 * 100). Since Ram and Shyam are in a joint venture for equal profits, Ram will also take over the remaining goods at the same gross profit percentage. Therefore, the value of the goods taken over by Ram will be 33.33% of the remaining goods, which is Rs.13,333 (33.33% of 40,000).

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  • Current Version
  • Mar 21, 2023
    Quiz Edited by
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  • Aug 30, 2011
    Quiz Created by
    Sweetsalman123

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