BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following description is more likely to reflect the characteristic of a joint venture?
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The venturers cannot have their own business besides the venture.
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It will end immediately when the business is completed.
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Two parties joint together to make a continuing business.
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It is limited to the business of two parties only.
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Explanation:
Detailed explanation-1: -A joint venture is a temporary or a short duration partnership between two or more persons jointly. They do not use the name of the firm. Also, this partnership is for a specific purpose and for a specific time. They also share profits and losses in the agreed ratio.
Detailed explanation-2: -Features of Joint Venture Agreement Funds: The funds used for each business are brought to the joint venture account. Sharing of Profits or Losses: The profits or losses are shared as per the terms agreed between the co-venturers. If there is no such agreement, it is shared equally.
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