Course:
CMA Foundation
1) Credit balance of joint venture account represents:
(a) Loss (b) Due to coventurer
(c) Profit (d) Due to supplier
2) Joint venture is a ______ partnership.
(a) Permanent (b) Temporary
(c) Illegal (d) Registered
3) Which of these accounts are not opened in a Joint venture Accounts?
(a) Joint Bank A/c (b) Joint Venture A/c
(c) Co-venturer’s personal A/c (d) Stock Reserve
4) Which of the following is not a difference between the joint venture and partnership.
(a) There is no specific act regarding joint venture
(b) The persons carrying on venture are known as Co-venturers
(c) Co-venturers share profit/loss of the venture at an agreed ratio
(d) Joint venture is limited to a specific purpose
5) When Co-Venturers initially contribute for a joint venture which account should be debited in
the case when separate set of books are maintained –
(a) Purchase A/c (b) Joint Venture A/c
(c) Venturer’s Capital A/c (d) Joint Bank A/c
6) Which of the following accounts are maintained in the joint venture when separate set of books
are maintained –
(a) Joint Bank A/c (b) Joint Venture A/c
(c) Co-venturer’s A/c (d) All of these
7) For opening Joint Bank account, in case of separate sets of books:
(a) Venture A/c will be debited and Ventures A/c will be credited
(b) Joint Bank A/c is debited and Ventures Capital A/c is credited
(c) Joint Venture A/c is debited and Joint Bank A/c will be credited
(d) Joint Bank A/c will be debited and Joint Venture A/c will be credited
8) For purchase of plant from Joint Bank Account, in case separate sets of books are maintained,
the correct journal entry will be:
(a) Plant A/c will be debited and Joint Bank A/c will be credited
(b) Joint Venture A/c will be debited and Joint Bank A/c will be credited
(c) Plant A/c will be debited and Ventures Capital A/c will be credited
(d) Joint Venture A/c will be debited and Plant A/c will be credited
9) Which of the following statement is true when separate set of books is maintained?
(a) Expenses paid by venturer will be credited to joint bank account
(b) Expenses paid by venturer will be credited to venturer’s capital account
(c) Expenses paid by venturer will be credited to Joint Venture account
(d) Expenses paid by venturer will be credited to Outstanding Expenses Account
10) In a joint venture for plots, between Ahuja and Saluja, where separate books are kept; The entry
for Land purchased for Rs.2,00,000 will be
11) In a joint venture for plots, between Ahuja and Satuja, where separate books are kept; and where
the ratio of contribution was 3:2.
At the end of the venture, if there is a profit of Rs.95,000; in the absence of any specific profitsharing ratio, the following entry will be passed:
12) Shri Kedar of Nagpur and Shri Deshmukh of Karol undertook in April 2023 the construction of
Poonam Market Hall for Rs.6,00,000 to be completed within a year. On the same date Kedar
brought in Rs.1,00,000 and Deshmukh brought in Rs.50,000, to be deposited in a Joint Bank A/c.
They agreed to share the profit or loss in the ratio of 2:1 respectively. The following expenses
were paid from the Joint Bank A/c – Materials – Rs.2,25,000, Wages – Rs.1,95,000 and Plant
Rs.40,000. The construction was completed in time, but there was some defect in construction
work so the contract price was received after deducting Rs.15,000. At the end of the work, plant
was considered as having depreciated by 20%. Half of the plant was taken over by Kedar and
remaining half was sold for Rs.15,000.
(a) Profit Rs.1,56,000 (b) Loss Rs.1,56,000
(c) Profit Rs.52,000 (d) Profit Rs.1,04,000
13) Kamal and Shamal entered into Joint venture to purchase and sell plots. Kamal contributed
Rs.5,00,000 and Shamal Rs.2,50,000 and the amount deposited into Joint Bank account The
transactions of the venture were as follows Purchased land Rs.2,50,000 Incurred development
expenses Rs.1,00,000 Shamal paid registration fees Rs.12,500 3/4 land was sold at Rs.3,76,250.
The remaining land was taken over by Kamal for Rs.1,00,000.
(a) Rs.13,750 (b) Rs.56,875
(c) Rs.1,13,750 (d) Rs.1,26,250
14) A purchased goods costing 1,00,000. B sold the goods for Rs.1,50,000. Profit sharing ratio between
A and B equal. If same sets of books are maintained, what will be the final remittance?
(a) B will remit Rs.1,25,000 to A
(b) B will remit Rs.1,50,000 to A
(c) A will remit Rs.1,00,000 to B
(d) B will remit Rs.25,000 to A
15) 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.10,000. He pays expenses amounting to Rs.1,000. V incurs
further expenses on carriage Rs.1,000, He receives cash for sales Rs.15,000. He also takes over
goods to the value of Rs.2,000. The profit on joint venture is:
(a) Rs. 3,000 (b) Rs. 5,000
(c) Rs. 6,000 (d) Rs. 3,500
16) A and B enter into a joint venture for purchase and sale of Type-writer. A purchased typewriter
costing Rs.1,00,000. Repairing expenses Rs.10,000, printing expenses Rs.10,000. B sold it at 20%
margin on selling price. The sales value will be:
(a) Rs. 1,25,000 (b) Rs. 1,50,000
(c) Rs. 1,00,000 (d) Rs. 1,40,000
17) A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd make an equity issue
of 1,00,000 equity shares of Rs.10 each. 80% of the issue are subscribed by the party. The profitsharing 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?
(a) 80,000 shares (b) 72,000 shares
(c) 12,000 shares (d) 8,000 shares
18) 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:
(a) Rs.35,500 (b) Rs.36,000
(c) Rs.34,000 (d) Rs.38,000
19) Ram in a joint venture with Shyam purchased goods costing Rs.20,000 and sends to Shyam for sale
incurring Rs.1,000 on freight. Shyam took the delivery and paid Rs.500 as carriage. He sold the
goods costing Rs.18,000 for Rs.25,000 and kept the remaining goods at cost price, sharing equal
profits of the venture, amount to be paid by Shyam to Ram will be:
(a) Rs. 25,000 (b) Rs. 22,250
(c) Rs. 23,750 (d) Rs. 24,500
20) X and Y enter into a joint venture. X supplied goods to Y from his own stock worth Rs.70,000. X
incurred expenses amounting to Rs.6000 on joint venture. The venture resulted in a total profit of
Rs.15,000 of which their ratio of distribution is 2:1. The entire sale proceeds were received by Y.
Amount received by X from Y in final settlement will be _____
(a) Rs. 85,000 (b) Rs. 86,000
(c) Rs. 80,000 (d) Rs. 75,000
21) In a joint venture between A and B, A spent Rs.3,000 on freight and also raised a loan from Bank
of Rs.50,000 at 18% p.a. repayable after one month B spend Rs.5,000 as selling expenses and he
also raised a loan from Bank of Rs.150,000 at 18% repayable after Two months. The total expenses
of Joint Venture will be –
(a) Rs. 8,000 (b) Rs. 8,500
(c) Rs. 9,500 (d) Rs. 13,250
22) M and N enter into a Joint venture where M supplies goods worth Rs.6,000 and spends Rs.100 on
various expenses. N sells the entire lot for Rs.7,500 meeting selling expenses amounting to Rs.200,
Profit sharing ratio equal. N remits to M the amount due. The amount of remittance will be:
(a) Rs. 6,700 (b) Rs. 7,300
(c) Rs. 6,400 (d) Rs. 6,100
23) A purchased goods costing 42,500. B sold goods costing Rs.40,000 at Rs.50,000. Balance goods
were taken over by A at same gross profit percentage as in case of sale. The amount of goods
taken over will be:
(a) Rs. 3,125 (b) Rs. 2,500
(c) Rs. 3,000 (d) None of the above
24) 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:
(a) Rs. 35,500 (b) Rs. 36,000
(c) Rs. 34,000 (d) Rs. 38,000
25) A bought goods of the value of Rs.10,000 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:
(a) Rs.10,000 (b) Rs.8,000
(c) Rs. 6,000 (d) Rs.9,000
26) A and B were partners in a joint venture sharing profits and losses in the proportion 3/5th and
2/5th respectively. A supplies goods to the value of Rs.60,000 and incurs expenses amounting
Rs.6,000. B supplies goods to the value of Rs.16,000 and his expenses amount to Rs.3,000. B sells
goods on behalf of the joint venture and realizes Rs.1,20,000. B entitled to a commission of 5% on
sales. B settles his account by bank draft. How much amount, B will pay to A as final settlement?
(a) Rs.83,400 (b) Rs.93,200
(c) Rs.80,000 (d) Rs.66,000
27) A purchased 1000 kg of rice costing Rs.200 each. Carriage 2,000, insurance 3,000. 4/5th of the
boxes was sold by B at Rs.250 per boxes. Remaining stock were taken over by B at cost. The
amount of stock taken over will be –
(a) Rs.40,000 (b) Rs.41,000
(c) Rs.50,000 (d) Rs.50,200
28) Goods costing Rs.10,000 destroyed by an accident, insurance claim nil.
(a) Rs.10,000 will be credited to Joint Venture Account
(b) No Entry will be made in the books of Joint Venture
(c) Rs.10,000 will be debited in Joint Venture Account as Loss
(d) Rs.8,000 will be credited in Joint Venture Account
29) A and B enter into joint venture sharing profit and loss equally. A purchased 100kg of rice @
Rs.20/kg. Brokerage paid Rs.200, carriage paid Rs.300. B sold 90kg of rice @ 22/kg. Balance rice
were taken over by B at cost. The value of rice taken over to be recorded in joint venture will be:
(a) Rs.200 (b) Rs.250
(c) Rs.230 (d) Rs.220
30) A and B enter into a joint venture sharing profits and losses equally. A purchased 5,000 kg of rice
@ Rs.50/kg. B purchased 1,000 kg of wheat @ Rs.60/kg. A sold 1,000 kg of wheat @ Rs.70/kg and
B sold 5,000 kg of rice @ Rs.60/kg. What will be the final remittance?
(a) B will remit Rs.2,10,000 to A
(b) A will remit Rs.2,10,000 to B
(c) A will remit Rs.2,00,000 to B
(d) B will remit Rs.1,80,000 to A
31) A and B entered into a joint venture. They opened a joint bank account by contributing Rs.2,00,000
each. The expenses incurred on venture is exactly equal to Rs.2,00,000. Once the work is
completed, contract money received by cheque Rs.4,00,000 and in shares Rs.50,000. The shares
are sold for Rs.40,000. What will be the profit on venture?
(a) Rs.2,50,000 (b) Rs.2,40,000
(c) Rs.4,40,000 (d) Rs.4,50,000
32) In a Joint venture A contributes Rs.5,000 and B contributes Rs.10,000. Goods are purchased for
Rs.11,200. Expenses amount to Rs.800. Sales amount to Rs.14,000 the remaining goods were taken
by B at an agree price of Rs.400. A and B share Profit and losses in the ratio of 1:2 respectively.
As a final settlement, how much A will receive?
(a) Rs.5,800 (b) Rs.6,000
(c) Rs.5,000 (d) Rs.10,800
33) A and B enter into a joint venture sharing profits and losses equally. A provides goods from his
stock Rs.10,000. H pays expenses amounting to Rs. 1,000. B incurs further expenses on carriage
Rs.2,000. He receives cash for sales Rs.15,000. He also takes over goods to the value of Rs.3,000.
What will be the amount to be remitted by B to A?
(a) Rs.13,500 (b) Rs.15,000
(c) Rs.11,000 (d) Rs.10,000
34) In a Joint venture, A contributes Rs.8000 and B contributes Rs.10000. Goods are purchased for
Rs.11,000. Expenses amount to Rs.1,000. Sales amount to Rs.14,000 the remaining goods were taken
by B at an agreed price of Rs.400. A and B share profit and losses in the ratio of 1:2 respectively.
As a final settlement, how much A will receive?
(a) Rs.8,800 (b) Rs.9,000
(c) Rs.8,000 (d) Rs.13,800
35) A and B entered into a joint venture to purchase and sell a new item. They agreed to share the
profit and losses equally. A purchased goods worth Rs.90,000 and spent Rs. 25,000 in sending the
goods, B spent Rs. 5,000 as selling expenses and sold goods for 2,00,000. What will be the amount
to be remitted by B to A as final settlement?
(a) Rs.1,55,000 (b) Rs.1,50,000
(c) Rs.1,15,000 (d) Rs.80,000
36) A and B enter into a joint venture sharing profit and losses equally. A purchased 5000 kg of rice
@ Rs.25/kg. B purchased 1000 kg of wheat @ Rs.30/kg. A sold 1000 kg of wheat @ Rs.35/kg and B
sold 5000 kg of rice @ Rs.30/kg. The profit on venture will be:
(a) Rs.55,000 (b) Rs.50,000
(c) Rs.60,000 (d) Rs.30,000
37) A purchased goods costing 1,00,000. B sold the goods for Rs.1,60,000. Profit sharing ratio between
A and B equal, what will be the final remittance?
(a) B will remit Rs.1,30,000 to A
(b) B will remit Rs.1,55,000 to A
(c) A will remit Rs.1,05,000 to B
(d) B will remit Rs.30,000 to A
38) A and B enter into a joint venture to underwrite the shares of a company which make an equity
issue of 100000 shares of Rs.10 each. 80% of the issue was subscribed by the public. The profitsharing ratio between A and B is 3:2. The balance shares not subscribed by the public, were
purchased by A and B in profit sharing ratio. How many shares to be purchased by B.
(a) 80,000 shares (b) 72,000 shares
(c) 12,000 shares (d) 8,000 shares
39) Which of these is not a point of difference between consignment and Joint venture?
(a) Principal agent relationship vs. Equal ownership
(b) Commission vs. Profit sharing
(c) No Capital contribution vs. Capital contribution
(d) None of these
40) Under Joint Bank Account method which of these accounts are not opened:
(a) Joint Bank A/c (b) Memorandum A/c
(c) Joint Venture A/c (d) Co-Venturer personal A/c
41) For material supplied from own stock by any of the venturer, the correct journal entry will be:
(In case of separate sets of books of a Joint Venturers)
(a) Joint Venture A/c debited and Venturers Capital A/c credited
(b) Joint Venture A/c debited and Joint Bank A/c credited
(c) Joint Venture A/c debited and Material A/c credited
(d) Joint Bank A/c debited and Joint Venture A/c credited
42) Which of these accounts is not a part of double entry system?
(a) Memorandum A/c (b) Joint Bank A/c
(c) Joint Venture A/c (d) Co-Venturer A/c
43) What does the balance in Memorandum Joint Venture A/c Shows?
(a) Closing stock (b) Profit and loss
(c) Balance due to other co-venture (d) Un-reconciled balance
44) X a co-venture returns goods to other co-venture Y. in whose books the transaction would be
recorded under Memorandum Joint Venture Method:
(a) Y (b) X
(c) X and Y (d) None of them
45) If a venturer draws a bill on his co-venturer and if the drawer discounts the bill with same sets
of books maintained, the discounting charges will be borne by____
(a) The drawer of the bill
(b) The drawee of the bill
(c) The discounting charges will be recorded in memorandum account
(d) The discounting charges will be borne by bank
46) Generally, when the size of the venture is ____, the co-venturers keep separate set of books of
account for the joint venture.
(a) Small (b) Medium
(c) Big (d) All of the above
47) Joint venture account is:
(a) Personal A/c (b) Real A/c
(c) Nominal A/c (d) None of above
48) 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 –
(a) Rs. 1,500 (b) Rs. 7,500
(c) Rs. 3,500 (d) None of above
49) 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?
(a) Rs. 6,00,000 (b) Rs. 4,00,000
(c) Rs. 3,00,000 (d) Rs. 5,00,000
50) If unsold goods costing Rs.20,000 is taken over by Venture at Rs.15,000, the Joint Venture A/c
will be credited by:
(a) Rs. 20,000 (b) Rs. 15,000
(c) Rs. 5,000 (d) NIL
ANSWERS:
1) (c)
2) (b)
3) (d)
4) (c)
5) (d)
6) (d)
7) (b)
8) (b)
9) (b)
10) (c)
11) (c)
12) (a)
13) (c)
14) (a)
15) (b)
16) (b)
17) (c)
18) (a)
19) (c)
20) (b)
21) (d)
22) (a)
23) (a)
24) (a)
25) (b)
26) (a)
27) (b)
28) (b)
29) (b)
30) (a)
31) (b)
32) (a)
33) (a)
34) (a)
35) (a)
36) (d)
37) (a)
38) (d)
39) (d)
40) (a)
41) (a)
42) (a)
43) (b)
44) (d)
45) (c)
46) (c)
47) (c)
48) (a)
49) (a)
50) (b)