ACC2682 - Revision (Chapter 1)

Which of the following item will NOT be in the financial statements of an Islamic entity?

• Administrative expenses

• Income from investment

• Interest on loan

• Overdraft fees

Which of the followings are considered as an external user of accounting information?

• Accountant

• Zakat authorities

• Finance manager

• Chief Financial Officer

Islamic accounting is ______________ but conventional accounting is_____________.

• based on religious values; based on international/national accounting standards

• concerned with revenue maximization; concerned with fairness and transparency

• focused on profit maximization; focused on satisfying society’s needs

• principles-based; flexible and subject to manipulation

Which of the following explains the application of accrual accounting principles in

       Islamic Accounting?

• A business is assumed to continue its operations in the foreseeable future.

• Revenue is recognised when payment is received, and expenses are recorded when payment is made.

• Revenue earned and expenses incurred included all cash and credit transactions.

• Measurement of zakat is based on 2.5% of one lunar year’s profit.

Which of the following is forbidden in Islamic business transactions?

• Buying and selling goods on credit.

• Charging interest on amount lent.

• Issuing equity shares to shareholders.

• Selling goods higher than their original cost.

Islamic accounting is based on the principles of fairness, justice, and transparency.

• True

• False

Islamic accounting is only applicable to Islamic financial institutions.

• True

• False

Gambling and alcohol business are not encouraged in Islam.

• True

• False

Materiality in Islamic accounting is based solely on the impact on the financial position and performance of an organization.

• True

• False

To be valid, a contract must have an offer and an offeree.

• True

• False