When goods are purchased for the Joint Venture, the amount is debited to
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EPFO AO EO 2017
Purchase Account
Incorrect AnswerJoint Venture Account
Correct AnswerVenturer's Capital Account
Incorrect AnswerProfit and Loss Account
Incorrect AnswerExplanation:
- In joint venture accounting, transactions specific to the venture are tracked separately.
- Option 1: Purchase Account - Used for regular business purchases, not specific to joint ventures.
- Option 2: Joint Venture Account - Correct. Goods purchased for a joint venture are debited to the Joint Venture Account to specifically reflect the costs associated with that venture.
- Option 3: Venturer's Capital Account - Reflects individual partners' equity or contributions, not direct operational transactions.
- Option 4: Profit and Loss Account - Used for summarizing overall profits and losses, not for tracking purchase transactions in a joint venture.
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