V2----Deptt: of Commerce. B. Z.
University, Multan
Midterm Exam _Islamic Finance
BS A&F_6th Semester_Marks: 30
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Instructions:
1. Answer the questions by providing “answer to question 1”, do not reproduce the question.
2. Students should submit handwritten and scanned answer scripts (in pdf form) at [email protected] and cc to:
[email protected] within 15 minutes after the exam.
3. Students should also submit original answer scripts to the department, in person (to relevant program clerk) or through UMS
or registered post on last day of the exam.
4. Delay in submission may result in deduction of marks or re-examination.
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Question 1: Fill in the blanks with an appropriate choice. [12]
1. --------------------- governance and ----------------------- governance are so close and cannot be separated in an
Islamic corporate entity.
2. Any form of interest-free banking based on ethical ideals of financial transactions will be recognized as
------------------------------------.
3. Bay Inah as an exchange-based contract signifies----------------------------------------.
4. The hybrid sale contract where a customer approaches a bank or financial institution to purchase a commodity
with payment arranged on instalment basis and the customer in turn sells the commodity to a third party for cash
is ----------------------------------.
5. ----------------------------- contracts are speculative or uncertain contracts which involve excessive risks.
6. The prohibition of ------------------ arises from the premise that the agreement between the parties involves certain
immoral and undue benefits based on false hopes in the contract.
7. What differentiates between financial accounting in both traditional and Islamic
frameworks is the ________________ of the former with Sharī‘ah rules and regulations.
8. The Islamic finance industry requires its own set of _________________ standards.
9. It is a common practice to have __________ members in the Sharī‘ah Board.
10. __________ is the model used for the institutionalisation of Sharī`ah governance in Islamic financial institutions
that focuses on Sharī`ah advisory and consultancy.
11. Setting the overall policy and strategy in corporate governance of Islamic financial institutions is the responsibility
of------------------------.
12. ---------------------------------- model tends to emphasize the stakeholder-value system.
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Question 2: Circle the right choice. [8]
1. _______ is the formal record of the financial activities (transactions) of a business entity.
a) bookkeeping
b) Statement of profit and loss
c) Financial statement
d) comparative Financial statement
2. Which one of the following items is not a purpose of Islamic accounting?
a) reporting accurate income determination
b) promoting efficiency and leadership
c) maximizing returns on invested capital
d) adapting to positive social change through corporate social
responsibilities
3. Accounting comprises of the following two main businesses:
a) bookkeeping and financial analysis
b) financial analysis and the preparation of the financial statements
c) bookkeeping and the preparation of the financial statements
d) none of the above
4. The main goal of the IFRS is to:
a) promote reconciliation and settle financial and commercial disputes between financial or commercial
institutions
b) ensure best practices and help member countries with regulating Islamic financial institutions
c) set the standards for minimum qualifications needed to gain entry into the IFSI (technical financial skills and
adequate knowledge of Shariah and Islamic financial principles)
d) provide globally acceptable standards for public companies in the preparation and disclosure of their
financial statements
5. The annual Sharī‘ah compliance report is submitted to
a) the board of directors (BOD) who distributes same to the shareholders at the AGM
b) members of the public including the investment account holders (IAH)
c) the supervisory authority in the jurisdiction may have access to the report
d) all of the above
6. The internal Sharī‘ah audit/review report on the products offered to customers is submitted to the
a) audit committee
b) shareholders
c) senior management of the IFI
d) all of the above
7. The internal Sharī‘ah audit of Islamic financial institutions reports to the:
a) audit committee
b) Sharī‘ah board
c) board of directors
d) all of the above
8. In a single proprietorship, the statement of retained earnings may also be called:
a) equity statement or statement of owner’s equity
b) statement of partners’ equity
c) statement of retained earnings and stockholders' equity
d) none of the above
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