QUESTION 1 (10 Marks)

Financial accounting generally deals with recognition, measurement, recording and presentation of the elements of financial statements.

REQUIRED:

1. Explain Five (5) differences between Islamic accounting and conventional accounting?[10 Marks]

QUESTION 2 (30 Marks)

Accounting concepts are variously referred to as principles, axioms, postulates, assumptions and rules. AAOIFI has issued a Statement of Accounting Concepts to guide in the practice of accounting for Islamic financial institutions. The conventional accounting concepts have scrutinized to ensure that they are in lined with Islamic principles and Shariah.

REQUIRED:

1. What are the Islamic accounting concepts?[10 Marks]

1. Define conventional accounting concept?[10 Marks]

1. Explain the qualitative characteristics of accounting information?[10 Marks]

QUESTION 3 (20 Marks)

Murabahah has been widely used by many Islamic banks and financial institutions as a mode of financing in various financing facilities such as home financing, motor vehicle financing, personal financing and trade financing.

REQUIRED:

1. Illustrate an Ordinary Murabahah Structure[10 MARKS]

b.Illustrate Murabahah Structure for Motor Vehicle Financing [10 MARKS]

QUESTION 4 (20 Marks)

Assume the following:

1. An Islamic bank provides the capital to the Mudarabah.
2. The Mudarib buys cars from the dealer on a spot basis.
3. The Mudarib sells the cars to the buyer on deferred payment basis at cost plus a mark - up on a 36 - month - instalment basis (Murabahah sale).
4. The buyer will start repayment at the end of the first month.
5. Each month the Mudarib will deposit the monthly repayment with the bank.

REQUIRED:

1. Design a flow chart to demonstrate the role played by each party in this transaction

[10 MARKS]

1. Explain the types of Mudarabah[10 MARKS]