Three joint operators agree to an arrangement in which they have an equal share in an agricultural joint operation. The work undertaken in setting up the joint operation cost $300 000 and each operator contributed in cash. Each operator will need to recognise the following accounting entry:

Question

Quizplus · Accepted Answer

Each operator contributed in cash towards the set up of the joint operation. The accounting entry to recognize this contribution would be to credit cash and debit the bank account. Option D represents this entry correctly. Option A shows a credit to the bank account, which is incorrect, while option B and C show debits to the cash account, which is also incorrect.

Three Joint Operators Agree to an Arrangement in Which They