ACCA Financial Management (F9) Certification Practice Exam

In a musharaka partnership, what is typically shared among partners?

1. Increased market share

2. Management responsibilities

3. Profits based on agreed ratios

4. Losses based on expertise

The correct answer is: Profits based on agreed ratios

In a musharaka partnership, which is an Islamic financing arrangement, the key feature is the sharing of profits among partners. The profits are distributed according to pre-agreed ratios that reflect each partner’s investment and contribution to the partnership. This aspect encourages collaboration and ensures that all partners benefit equitably from the partnership's success. While other factors, such as management responsibilities and losses, may also be discussed within the context of a musharaka, the unique characteristic that defines this partnership structure is the way profits are allocated. Losses can be shared based on the investment made, reinforcing the principle that all partners are jointly responsible for both the successes and failures of the business. Thus, the answer emphasizes the fundamental concept of profit-sharing that is central to musharaka partnerships, distinguishing it from other business structures where profit and loss sharing might follow different principles.