Islamic Accounting Standards: Accounting for Zakah

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5 Questions

What is the meaning of Zakah?

Blessing, purification, increase, and cultivation of good deeds

Which of the following is NOT one of the central features of Islam's five pillars?

Charitable donations (sadaqah)

What is the difference between Zakah and charity?

Zakat is a compulsory levy on wealth and income, while charity is voluntary

Who are allowed to receive Zakah according to the Quran?

The poor, the needy, and those employed to administer the funds

What does Sadaqah refer to in relation to Zakah?

Charitable donations

Study Notes

Zakah and Charity

  • Zakah means purification and growth, as it purifies one's wealth and soul, and brings growth to the individual and society.

Difference between Zakah and Charity

  • Zakah is obligatory for Muslims who meet certain conditions, whereas charity (Sadaqah) is voluntary and can be given at any time.

Central Features of Islam

  • The five pillars of Islam are Shahadah, Salat, Zakah, Sawm, and Hajj; the correct answer is that Jihad is NOT one of the central features.

Recipients of Zakah

  • According to the Quran, the following eight categories of people are allowed to receive Zakah: the poor, the needy, the zakah collectors, the new converts to Islam, the slaves in bondage, the debtors, the warriors in the cause of Allah, and the wayfarers.

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