JAIIB AFM MARATHON 2
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the formula for calculating Return on Equity (ROE)?
ROE = Net Profit After Tax / Shareholders' Equity × 100. It measures how efficiently a bank uses shareholders' funds to generate profit.
What is the meaning of 'Dual Aspect Concept' in accounting?
Every transaction has two equal and opposite aspects.
What does the Current Ratio indicate in financial analysis?
The Current Ratio = Current Assets / Current Liabilities, indicating a firm's ability to meet short-term obligations. A ratio above 1 is generally considered healthy.
What is the difference between Book Value and Market Value of a share?
Book value is accounting value; market value is current trading price.
What is the difference between capital reserve and revenue reserve?
Capital reserve arises from capital profits (e.g., profit on sale of fixed assets) and cannot be distributed as dividend, whereas revenue reserve is created from operating profits and can be used for dividend payment.
What is Weighted Average Cost of Capital (WACC)?
Average cost of all capital sources weighted by their proportions.
What is meant by 'Window Dressing' in accounting?
Window dressing refers to the manipulation of financial statements to present a more favorable picture of a company's financial position, often done just before the reporting date to impress investors or creditors.
What is the concept of 'Matching Principle' in accounting?
Expenses must be matched with revenues in the same period.
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