JAIIB AFM Recollected Questions: Memory-Recalled MCQs

IIBF 18 June 2026 · 10 min read

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JAIIB AFM Recollected Questions: Memory-Recalled MCQs

JAIIB AFM Recollected Questions from Previous Exam Sessions

This article compiles memory-recalled questions from the JAIIB Accounting and Financial Management for Bankers (AFM) paper. Previously known as Accounting and Finance for Bankers (AFB) under the old syllabus. These questions were recalled by JAIIB pass-outs after their exam sessions and cover topics that continue to appear in the current AFM syllabus. Going through these recollected questions helps candidates understand the pattern and difficulty level of the actual JAIIB AFM exam.

JAIIB is conducted twice a year by IIBF; visit iibf.org.in for the latest exam schedule and session dates.

Key Points

Recollected questions reveal the actual difficulty level and topic distribution in the JAIIB AFM exam.
Core topics like depreciation, payback period, NPV, ratio analysis, and bond valuation appear consistently across sessions.
Questions on accounting concepts (going concern, business entity, conservatism) are frequently asked.
Numericals on compound interest, currency exchange, and bond yield require formula-based practice.
KYC, CBS, PMLA-related questions appear in the banking operations section of the paper.

Topic-wise Recollected Questions

Section A: Accounting Concepts and Principles

What are the methods or basis of accounting? (Cash basis vs Accrual basis)
What is an asset? Is it a Source of funds, Use of funds, Cash inflow, or none of it?
What types of accounts are debited or credited in the Profit and Loss Account? Real accounts, only nominal accounts, some real and some nominal, or only personal?
Short notes on accounting standards (AS) — their applicability and importance.
What are the types of errors that can happen in accounting?
In case of clerical errors: Error of commission, Error of omission — what is the name of the third category?
What is computerised accounting?
What are the advantages of computerised accounting?
Some questions on cost concept and going concern concept of business.
What are examples of accounting concepts? (Going concern, conservatism, business entity, dual aspect)
What is the definition of data in computing context?
What is voucher posting in banking?

Section B: Depreciation

Questions from the topic of depreciation — SLM, WDV, and sum of digits methods.
What is the Written Down Value (WDV) method and sum of digits method?
Practical questions on WDV method of depreciation with numerical examples.
What is the formula for the straight-line method?
Formula: Annual Depreciation = (Cost of Asset - Residual Value) / Useful Life

Section C: Capital Budgeting

What is the Payback period and NPV?
Some practical problems on NPV and IRR.
What is the average rate of return?

Section D: Financial Mathematics and Time Value of Money

If the population of a city in the current year is 24,00,000 and it is increasing by 7% per annum, what will be the population after 6 years? What was the population 4 years ago? What is the population difference between those years?
How are Future Values calculated?
What is present annuity and future annuity?
What is the definition of an annuity?
What is the sequence of payment in case of annuity?
If the 1-year discount factor is 0.8333, what will be the discount rate (interest rate) per annum?
Answer: 1/0.8333 - 1 = 20% per annum
If the Principle is Rs.10,000 and after 3 years it becomes Rs.16,000 (compounded annually), find the rate of interest after 3 years.

Section E: Bank Reconciliation and Cash Book

Questions on differences between cash book and bank passbook.
Preparation of cash book.
Why do standing instructions lead to differences in the balance as per the bank passbook and cash book?

Section F: Ratio Analysis

Problems on ratio analysis.
If Current Ratio = 2:1, Quick Ratio = 1.5:1, and Current Liabilities = Rs.1,60,000 — what is the value of inventories?
Solution: Current Assets = 2 x 1,60,000 = 3,20,000. Quick Assets = 1.5 x 1,60,000 = 2,40,000. Inventories = 3,20,000 - 2,40,000 = Rs.80,000
What is the formula for Debt Service Coverage Ratio?
DSCR = (Net Income + Depreciation + Interest) / (Principal Repayment + Interest)

Section G: Bond Valuation and Investment

What is Coupon rate and current yield?
Market price of bond = Rs.4,500; Face value = Rs.5,000; Coupon rate = 12%. What is the current yield?
Current Yield = (12% x 5,000) / 4,500 = 600/4,500 = 13.33%
If the Face value of Bond is Rs.100, the Coupon rate is 12%, maturity is in 5 years, and ROI is 15%, what is the value of the bond?
What are Zero Coupon Bonds?
What is the Forward rate?
What is the Floating rate?
What is Global Depository Receipt (GDR)?

Section H: Foreign Currency and Exchange

If 1$ = Rs.71.00 and 1$ = 22 Singapore dollars, what is the value of INR for 1 Singapore dollar?
1 Singapore Dollar = 71/22 = Rs.3.23 approximately
If 1$ = Rs.69.2135 / Rs.69.3525, what would Rs.100 = ___$?
Practical questions on foreign currency and foreign exchange transactions.

Section I: Opening Stock and Closing Stock

Calculation of opening stock and closing stock.
Calculation of net profit and cost of goods sold.
Practical problems on balance sheet preparation and interpretation.

Section J: Problems on Balance Sheet

Questions related to balance sheet preparation.
Problems on YTM and bond value.
Rectification of errors — journal entries and suspense account treatment.
What kind of account is Rent receivable? (Personal Account — Accrued Income)
Questions on real and nominal accounts.

Section K: Shares and Debentures

Problems on shares and debentures.
Questions on capital shares.
How many types of accounts are there in accounting and what are they?
How do accounts get debited or credited?
Trademark is classified as which account? (Intangible Real Account)
What are the classifications of errors?
What is a Non-Voting Share?

Section L: Banking Operations (AFM Specific Topics)

In which Act is the term "Banking" defined? (Banking Regulation Act, 1949)
What is the Risk Category of KYC?
What is the maximum withdrawal limit of a small account in a month?
What are the Cheque Collection days?
What is Vault or Custody Key?
What do you mean by DEAF Account? (Dormant, Erstwhile Account Facility)
What is a Certificate of Deposit?
What do you mean by Core Banking Solution?
What is the transaction limit of IND-FIU (Financial Intelligence Unit) in a month?
What is a Prime entry?
What are Officially Valid Documents (OVD)?
Which document(s) are NOT considered as Officially Valid Documents? How can a customer open an account without providing any OVD?
What documents are required to be collected for the sole proprietor's current account?
Which activities do not fall under the category of para-banking activities?
Why does every bank have an account in other banks?
What is the minimum requirement of age for a minor to operate a bank account?
What are the parties to a promissory note?
What is BCSBI (Banking Codes and Standards Board of India)?
Which type of account cannot be opened for Foreign Currency Non-Resident (Bank) deposits (FCNRB)?
What is outsourcing of service in a bank?
What is Front Office and Back Office in banking?
What are Bills of Exchange?
What is a Subsidy Book?
What kind of company is FCI (Food Corporation of India)?
What do you mean by Computer, Hardware, and Software?

Section M: Partnership and Company Accounts

Questions relating to partnership, registration, and members.
Compound interest problems.
What is the Written Down Value and sum of digits depreciation?

Accounting in Core Banking Solution (CBS)

Questions on CBS accounting often appear in the AFM paper. Core Banking Solution integrates all branches of a bank through a centralised system, enabling real-time transaction processing. Key points tested include:

How vouchers are posted in CBS (system-generated vs manual vouchers)
Centralised accounting vs branch-level accounting under CBS
Role of CBS in reducing errors and ensuring audit trail
E-KYC integration with CBS for account opening

FAQ: JAIIB AFM Recollected Questions

Q1. What is the current yield of a bond and how is it calculated?

Current yield = Annual Coupon Payment / Current Market Price of the Bond. For example, if a bond has a face value of Rs.5,000, coupon rate of 12%, and market price of Rs.4,500, then Current Yield = (12% x 5,000) / 4,500 = 600 / 4,500 = 13.33%.

Q2. What types of errors are NOT revealed by a Trial Balance?

The Trial Balance does not reveal errors of omission (a transaction entirely omitted from the books). Errors of commission (wrong account debited/credited but with correct amount), compensating errors (two errors that cancel each other out), and errors of principle (wrong classification of transactions).

Q3. What is the formula for the Written Down Value (WDV) method of depreciation?

Under WDV method: Book Value at end of year = Opening Book Value x (1 - Rate of Depreciation). The rate under WDV is higher in early years and reduces over time. The asset is never fully written off to zero under this method.

Q4. What is a Zero Coupon Bond?

A Zero Coupon Bond does not pay periodic interest (coupon). Instead, it is issued at a discount to its face value and redeemed at par (face value) on maturity. The investor's return is the difference between the purchase price and the face value received at maturity.

Q5. What is the difference between Current Ratio and Quick Ratio?

Current Ratio = Current Assets / Current Liabilities. Quick Ratio (also called Acid Test Ratio) = (Current Assets - Inventory - Prepaid Expenses) / Current Liabilities. Quick Ratio is a more stringent test of liquidity as it excludes less liquid current assets like inventory.

Conclusion

The JAIIB AFM recollected questions compiled here span all major topics tested in the Accounting and Financial Management for Bankers paper — from basic accounting concepts and BRS to advanced topics like bond valuation. YTM, and CBS accounting. Regular practice of these questions, combined with formula-based revision for numerical topics, will significantly improve your confidence and exam readiness. For the official JAIIB exam schedule and syllabus, refer to iibf.org.in.

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Source: Indian Institute of Banking & Finance — iibf.org.in

JAIIB AFM Recollected Questions: Memory-Recalled MCQs