Which of the Following Describes a Feature That Applies to a Musharakah

question 28

Multiple Choice

Which of the following describes a feature that applies to a Musharakah contract?

• A)There is no guarantee of the capital.
• B)The capital providers are involved in business decision making
• C)The profit shared is limited to an agreed ratio.
• D)For the capital provider the losses are unlimited.

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Definitions:

Prospectus

A document required that describes the current status of a business and its future prospects.

Over-subscription

A situation where the demand for a company's new share offering exceeds the available supply.

AASB 101

Denotes the Australian Accounting Standards Board Standard 101, prescribing the basis for presentation of general purpose financial statements to ensure comparability both with the entity's financial statements of previous periods and with the financial statements of other entities.

Equity

Equity represents the value that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debts were paid off.