WHEN EXPENSES ARE PAID ON BEHALF OF THE VENTURE, THE ACCOUNTING ENTRIES IS TO DEBIT

• A. expenses account and credit bank account
• B. bank account and credit joint venture account
• C. joint venture account and credit bank account ✓
• D. joint venture account and credit expenses account

The answer to the question is: C. joint venture account and credit bank account

When expenses are paid on behalf of the venture, the accounting entries involve debiting the joint venture account and crediting the bank account.

When expenses are paid on behalf of the venture, it means that one party has incurred expenses on behalf of the joint venture. In accounting, this transaction needs to be recorded to ensure accurate financial reporting. The entry involves debiting the joint venture account to reflect the increase in expenses related to the joint venture and crediting the bank account to show the outflow of cash from the business.

The joint venture account represents the specific account used to record all transactions related to the joint venture. Debiting this account increases the expenses associated with the joint venture, reflecting the additional costs incurred. On the other hand, crediting the bank account indicates that cash has been utilized to pay for these expenses.

This accounting treatment ensures that the financial statements accurately reflect the impact of these expenses on the joint venture’s financial position. It also provides transparency regarding the utilization of funds and helps in tracking all transactions related to the joint venture.