Musharakah Financing FAS4 Quiz

Financial Accounting Standard No. 4 “Musharaka Financing” does not apply to any of the following except

• Mudaraba

• Zakah on Musharaka funds

• Accounting treatment of Musharakah transactions in the partner's books

• Financing transactions through constant Musharaka or diminishing Musharaka

Musharaka financing shall appear under the heading of __________________ in the Islamic bank’s __________________.

• Musharaka Liability, Income Statement

• Musharaka Liability, Balance Sheet

• Musharaka Financing, Income Statement

• Musharaka Financing, Balance Sheet

In which of the following is the historical cost of the share transferred (to the partner) deducted before the bank’s share is measured in the Musharaka capital at period end?

• Constant Musharaka

• Diminishing Musharaka

• Running Musharaka

• Modern Musharaka

In case diminishing Musharakah is terminated prematurely, any amount recovered in respect of the Bank’s share is to be _______________ to the bank’s Musharakah financing account.

• Credited

• Debited

• No amount shall be recovered in this respect

• Diminishing Musharaka cannot be liquidated prematurely

If the bank’s Musharaka profits are not settled at the time of Musharaka termination, such profits shall be recorded as _______________ due from/to ________________.

• Payables, partner

• Payables, client

• Receivables, partner

• Receivables, client

A disclosure must be provided by the Islamic bank in case of _____________ of the standard requirements with the bank’s charter or the local country laws.

• Compliance

• Adjustment

• Contradiction

• None of the above

Where the Musharaka capital is provided in the form of non-monetary assets, any decline in the fair value of such assets in relation to their book value shall be recognized as ______________ for the Islamic bank.

• Profit

• Unearned revenue

• Loss

• Receivable

The bank’s share in Musharaka capital is recognized upon its payment to the partner

• T

• F

Musharaka capital provided by the Islamic bank in kind shall be measured at book value of the assets.

• T

• F

Expenses related to the feasibility study, contracting procedures, etc. normally form part of the Musharaka capital.

• T

• F