9.When a bank reports Current Accounts as a liability, what would the Shariah compliant contract be in effect: (A)Ijarah (B)Qard (C)Mudharabah (D)Ijarah
9.When a bank reports Current Accounts as a liability, what would the Shariah compliant contract be in effect: (A)Ijarah (B)Qard (C)Mudharabah (D)Ijarah
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 10MC: What accounts are used to record a contingent warranty liability that is probable and estimable but...
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Question
9.When a bank reports Current Accounts as a liability, what would the Shariah compliant contract be in effect:
(A)Ijarah
(B)Qard
(C)Mudharabah
(D)Ijarah
Expert Solution
Step 1
Introduction:
Current account: Current account is used to represent the export and import made by the country in which payment is made to foreign investors and is also received from the foreign investors. The current account balance will be positive or negative i.e. surplus or deficit.
Option __(C) Mudharabah__ is correct answer.
Reason: Mudharabah is defined as financing contract between of a trust or a partnership in which one person gives money to other for investing the money in the business. The profit generated from the business is shared among the parties.
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