Broadly speaking, accounts of a joint venture business can be kept in any one of the following four ways:
1. In the Books of One Co-venturer: In case the business is not very large, only one of the venturers may be entrusted with the task of recording the transactions in his books. In that case, all other co-ventures will send their contribution to such venturer and he will open a Joint Venture Account and the personal accounts of other co-venturers in his books.
2. In the Books of All the Co-venturers: When all Co-venturers are working actively, each one of them shall open a Joint Venture Account and the personal accounts of other Co-venturers in his books. In such a situation, each Co-venturer informs others about the transactions undertaken by him so that they can incorporate them in their books.
3. Memorandum Joint Venture Account:Sometimes each Co-venturer records only such transactions as are directly concerned with him. In that case, he cannot work out the profit or loss because his books do not include all transactions of the joint venture. Hence, for calculating the profit or loss of the joint venture, a Memorandum Joint Venture Account has to be prepared by incorporating all transactions related to the joint venture. Thereafter the Joint Venture Account is completed and closed.
4. Separate Set of Books:Sometimes, for the sake of convenience, a separate set of books are maintained for the joint venture. Under this system, a Joint Bank Account, a Joint Venture Account and the personal accounts of all the co-venturers are to be opened in the independent set of books of account.
