INTRODUCTION
ThereTrade
are 2 Journey
major trade session
Winter
Directed to Yemen
The increasing
commercial activities
of Muslim traders
necessitated the
pooling fund to
finance increasing of
fund to finance
increasing European
demands for the
goods.
-Led to emergence of
Partnership
Need for proper accounting record and report (required by Quran):
- To account entrepreneurs and partners
-Requirement of Zakat as detailed in Shariah Islamiiah
Arab sailed
their galleys
along the
costs of
Arabia and
India, arrived
in Italy with
luxury goods
unknown in
Europe (Have
1976, p. 13)
Early stage
of Islamic
State
- Zakat and
other
revenues
were not of
great
financial
significance
and not
recorded.
During the
time of Caliph
Omar bin AlKhattab,
-the
geographical
expansion led
to significant
increases in
revenues and
the
responsibilitie
s of the
Islamic State.
-Sahaby
recommended
the
establishment
of records to
account the
states
revenues and
expenses
(recommende
d by AlWaleed bin
Hisham AlMugierah)
Caliph Omar
bin Al-Khattab
established
Diwan, but
the
contribution
of Muslim
traders
cannot be
ignores.
FACTORS THAT
CONTRIBUTED TO THE
DEVELOPMENT OF
ACCOUNTING RECORDS BY
1.
ZAKAT
2.
BAITULMAL
3. DELEGATION OF
DUTIES
1 Zakat
Zakat
fitrah
(alfitr)
obligatory payment
made annually under
Islamic law on certain
kind of property and
used for charitable and
religious purpose.
Zakat
from
earning
(al-mal)
t
p
e
c
n
o
C
in ti
a
l
u
calc akat
z
g
n
Careful
recording
and proper
observation
of the date
of
occurrence
(al-haol)
Required the
maintenance of
adequate
records and the
preparation of
accounting
reports to
discharge the
responsibility
paying zakat as
required by
shariah.
Financial institution
responsible for the
administration of
taxes in accordance
with shariah.
Managing
personal
finances
and
government
expenditure
s.
Functio
n
Baitul
mal
Distribute
zakat
revenue for
public
works
Reason to delegate :
- Identify and classify
of specialized skill
- Prevent the
accumulation of duty
under one person.
3
Use concept of
Ash-Shura
( consultation)
Delegatio
n of
duties
Necessary to select employees with
the appropriate knowledge and/or
experience in the particular field of
employment.
ACCOUNTING
RECORDS
DEVELOPED BY
MUSLIMS
Jaridah
The primary book recording was named Jaridah
Accounting clerk had to maintain the books,
sign his name at the end of the book, and
stamp it with the sultans seal
The Jaridah start with the phrase In the Name
of Allah, the Most Gracious, the Most Merciful
This is similar in the Pacioli records. Thus
support that Italian adopted knowledge from
another culture
The Jaridah and other accounting books were
developed and used
Types of Jaridah
i)Jaridah AlKharaj
ii)
Daftar
Omar bin Abdul Aziz is the first caliph to
make the issuance of receipts mandatory
There are three types of money collected :
i) Daftar Al Yawmiiah (daily book)
ii) Daftar Attawjihat (books of directions)
iii) Daftar Attahwilat ( books of transfers)
Types of Daftar
Daftar Al Yawmiiah (daily
book)
Types of Daftar
Daftar Attawjihat (books of
directions)
-to record budget expenses
-similar to general ledger
-used to control regional expenses and to ensure
province compliance with budget allocation.
- two types of budget :
a) Mukarrariyah operational budget
b) Itlakiyyah discretionary budget
Types of Daftar
Daftar Attahwilat ( books of
transfers)
-to record transfer of funds between the Wilayah
and the central government
-maintain by each Wilayah within the Islamic
State
- the central government approved the budget for
each Wilayah
- the difference between Daftar Attahwilat and
Daftar Attawjihat will transferred to or from the
central government and recorded in Daftar
Attahwilat
ACCOUNTING REPORTS
TYPES OF REPORT
AL KHITMAH
Definition : final or end
Prepared at the end of each month /
financial year
Initially prepared for government monthly
report
TYPES OF REPORT
AL KHITMAH AL JAMEAH
Definition : Comprehensive final report
Prepared annually by the accountant
Covered all financial activities of the
relevant Diwan
Showed the Diwans itemized revenues,
expenses, and surplus or deficit at the end
WHY???
of
the
financial
year.
a combined
Income
Statement and
Balance Sheet
If accepted by the
head of department
called as Al-Muwafakah
(acceptance)
approval of the report
balances by
the head of
the department
If not accepted
by the head of
department
Al-Khitmah Al Jameah
In the name of Allah, the Most Gracious, the Most merciful
Al-Khitmah Al-Jameah for Receipts and Expenses during the period
Muharram 1 to Dhul-Hejjah 30, Year.......H
Prepared by......., Assisted by........, Supervised by.........., Approved by............
Sources of Funds
REVENUES FOR THE PERIOD
a) Levies received from........., date received..............,
XXX
b) Other income, its source........, date received............, XXX
SUBTOTAL
XXX
ADD
a) Brought forward from last financial year
XXX
b) Sales
XXX
c) Reconciliations and Fines
XXX
d) Loans
XXX
e) Unclaimed Deceased Estate
XXX
f) Transfers
XXX
XXX
Al-Fadhlakah (Total) XXX
Use of Funds
a) Transfers to other Diwans
b) Purchases made by this Diwan
c) Other Expenses
Al-Hasel (Balance)
XXX
XXX
XXX
XXX
XXX
CONCLUSION