Lesson Notes By Weeks and Term - Senior Secondary 3

Joint ventures account I

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Term: 1st Term

Week: 7

Class: Senior Secondary School 3

Age: 17 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Financial accounting

Topic:-       Join ventures account I

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Explain the meaning of joint ventures account
  2. List and explain some terminologies in joint ventures account

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on consignment account

Students pay attention

STEP 2

EXPLANATION

She explains the meaning of joint ventures account

Students pay attention and participates

STEP 3

DEMONSTRATION

She lists and explains some terminologies in joint ventures account

Students pay attention and participate

 

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

JOINT VENTURES ACCOUNT

It is a form of business involving two or more persons, firms joining together with the aim of making profit over a specified period of time without any further business venture.

Parties involved in a joint venture business are known as venturers.

 

Main characteristics of Joint venture

For the fact that joint venture is temporary in nature, the following are its features

  1. No separate books are kept to record the transactions each venturer records transactions in his own books in his own part of the enterprises in normal accounting records.
  2. The profit sharing ratios must be clearly defined
  3. The capital, activities and scope of the ventures must be laid down, e.g. one venture buys and other sells, but both must make a contribution to the progress of the ventures.
  4. The arrangement is temporary in nature
  5. No specific and established law guides the activities of joint venture.

 

Differences between Joint venture and Partnership

Basis

Joint ventures

Partnership

Period

Temporary

Permanent

Regulation

Non –  regulation by law

Regulated by partnership act

Status of parties

Venture

Partner

Nature of agreement

Oral and / or implied

Oral / written

Nature of activities

One – offer once

Continuous

Responsibilities of

                   –

                            –

Parties

All are involved

All may not be involved

Accounting record sheet   Amount invested 

Memorandum and individual account Venture funds

Trading, profit and loss accounts and balance sheet capital

Types of business

Not applicable to all business

All business

Accounting periods

For the period of the venture business

For every fiscal year

 

ACCOUNTING PROCEDURE

Each venture opens an account to record all transactions that concern him. This account is usually tagged “Joint Venture / with the name of the other party to the venture”

The accounting records in each book are as follows:

NOTE

  1. The memorandum account does not form part of the double entry, but is a mere summary book of all the transactions among the ventures and to ascerform profit or loss on the venture.
  2. If profit is made; DR venture account and CR profit and loss account of each venture.
  3. If loss is made; DR profit and loss account and CR venture account
  4. When all these entries have been made, the balances remaining on the various joint venture accounts will show the indebtedness of one venturer to another.

Summary

  • A joint venture is simply a venture undertaken jointly by two or more persons or firms with a view to make profit.
  • Joint venture is different from partnership in that it is more a temporary character. It is often concerned with one isolated transaction, such as buying up bankrupt stocks.
  • Each venturer opens an account to record all members’ matters which concern the particular venture and this account is described as joint venture with the name of other venturer.
  • A statement of operation for the venturer’s activities prepared is called memorandum joint venture account.
  • Joint venture business is on – off business and not permanent in nature.

 

EVALUATION:

  1. Define joint venture accounts
  2. List and explain some terminologies in joint venture account

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively