UDE 2010 Islamic Financial and Accounting Concepts

QUESTION 1
Define the following term

1. asset
2. liability
3. equity
4. income
5. expenses

1.Assets
•Resources control by the enterprise as a result of past event and from which economic
benefit expected to flow to the enterprise.

2.Liabilities
•Present obligation of the enterprise arising from past events, the settlement of which
expected to result in an outflow from the enterprise resources.

3.Equity
•Legal and economic claims to the assets.
–Insider claim (shareholder {equity} or capital)
–Outsider claim (liabilities)

4.Income
•The flow of cash or cash equivalents received from work/ excess of revenue over expenses.

5.Expenses
•The flow of cash or cash equivalent spent or cost incurred in an entity’s effort to generate
revenues

QUESTION 2
Briefly explain all component of Islam.  
1. aqida - Islamic creed or articles of faith. The quranic formulation includes belief in God,
angels, prophets, scriptures, and the Day of Judgment. Early creeds reflected Shii-Sunni
polemics: Shiis upheld the notion of the designated imamate, and Sunnis responded that the
community elected the imam and that the historical order of the caliphates of Abu Bakr,
Umar, Uthman, and Ali was theologically proper. More detailed formulations stress a triad
belief in God, the Prophet, and the Day of Judgment as constituting the essential belief
system in Islam.
2. akhlaq - the practice of virtue, morality and manners in Islamic theology and philosophy.
3. sharia - referring to wide-ranging moral and broad ethical principles drawn from the Quran
and the practices and sayings (hadith) of Prophet Muhammad. These broad principles are
interpreted by jurists to come up with specific legal rulings and moral prescriptions.

QUESTION 3

1 Mr. Mustaffa Bin Bukhari

UDE 2010 Islamic Financial and Accounting Concepts

Briefly explain all pillars of Islam.

Syahada
declaration of faith and dedication to your belief that there is only one God, Allah SWT and that He
sent His Messenger, Prophet Muhammad (PBUH) to guide us

•Solat / Prayers
obligatory daily prayer that is carried out five times a day at set times. The five prayer times fall
between sunrise and midnight,

•Fasting
Fasting during the holy month of Ramadan is more than simply avoiding food. It is the practice of
discipline and the abstaining of temptations and bad habits. From sunrise to sunset, able Muslims
should avoid food and drink (including water), sexual activity, smoking and intoxication and any
impure thoughts.

•Zakat
literally means ‘to cleanse’ but is recognised by many as ‘charity’. In Islam, it is believed that Allah
SWT has intentionally created different levels of wealth for each individual to test humanity and
generosity amongst believers

•Haji
Muslims from around the world congregate in Mecca to worship Allah SWT and perform several
rituals to strengthen their faith and devotion

QUESTION 4
Briefly explain maqasid sharia.
maqasid sharia is the objective of the sharia law that include the following:
–Faith/Religion (ad-din)
–Life (nafs)
–Intellect (aql)
–Posterity/lineage (nasl)
–Property/ wealth (mal)

2 Mr. Mustaffa Bin Bukhari