The Extent of Applying Legitimate Procedures and Its Accounting Processes for Lease - to - Own ( Lease Purchase ) Transactions and Financing Health and Education in Islamic Banks : Case Study - Jordan

Abstract

The goal of this study is to demonstrate the extent of applying legitimate procedures and their accounting treatments for lease-to-own (lease purchase) transactions ending in the transfer of ownership (possessing) and in financing of education and health benefits by Islamic Banks. In order to achieve the objectives of this study, the scholars have prepared a questionnaire containing the legitimate executive procedures, the operations, the accounting records (accounting processes) and the time proved for each of these lease transactions ending in the transfer of ownership and in financing of health and education benefits by Islamic Banks. The population of study as a whole has been considered as a sample of the study, because the volume of the study population is small, represented by the only four Islamic banks in Jordan. The Questionnaire was distributed among these banks. The study reached to a conclusion that the Islamic Banks in Jordan apply the legitimate procedures in the leaseto-own (lease purchase) transactions and in financing health and education benefits. And that the processes and accounting records (accounting processes) that are in harmony with the legitimate procedures of lease-to-own (lease purchase) transactions and financing of health and education, and in accordance with standard No.8 of the Accounting and Auditing Organization For Islamic Financial Institutions. The researchers recommend a guide to the Islamic Banks in Jordan towards increasing their attention in the sphere of financing health and education, due to their positive effect on the society, in respect of meeting the needs of the society and keeping the society away from forbidden financial means.