ACC 4183 - QUIZ 2 - SALAM & ISTISNA'

The following are the principles of Salam, EXCEPT:

• Only commodity is delivered and not the money.

• Payment by installment

• Allowed in fungible commodities

• The time of delivery should be sufficient to allow use of Salam capital conveniently

___________ Islamic banks may sell the commodity before the date of delivery to other purchaser from the date of original delivery. The period in second contract will be shorter than the original contract, but price will be higher than the original contract.

• Salam

• Istisna'

• Mudarabah

• Parallel Salam

Which are the following the rules of parallel salam?

• Parallel Salam is allowed only with third parties.

• Both the contracts must be dependent to each other

• The third party giving bilateral promise should not pay the price in advance as this is not allowed in Shariah.

• Parallel salam involved only two parties

_______________ is a standard for the provision of salam and parallel salam financing and deposit taking by the Islamic bank.

• FAS No. 7

• MFRS 9

• FAS No. 9

• MFRS 7

One of the of salam financing is usually used to meet the need of _______________ who need money to grow their crops and to feed their family up to the time of harvest.

• Customer

• Government

• Small traders

• Tax authority

Besides Salam, _______________ is the other contract where a sale can be made without the subject matter of the contract being in existence at the time of contracting.

• Ijarah

• Salam

• Istisna'

• Murabahah

The following are the contractual conditions for Istisna’, EXCEPT:

• Price is fixed

• Type of subject matter is specific

• Unknown quality of subject matter

• Quantity of subject matter is known

In essence, Parallel Istisna’ is a ____________.

• Sub-contract

• Salam contract

• Mudarabah contract

• Sale contract

Which are the following is the journal entry to recognise and record transaction of Salam financing?

• Debit – Cash: Credit – Salam Financing

• Debit – Asset; Credit Salam Financing

• Debit – Account Receivable; Credit – Salam Financing

• Debit – Salam Financing; Credit – Cash

Which are the following is the journal entry to recognise and record transaction of asset delivery from farmer to the Islamic bank?

• Debit – Cash: Credit – Salam Financing

• Debit – Asset; Credit Salam Financing

• Debit – Account Receivable; Credit – Salam Financing

• Debit – Salam Financing, Credit - Cash