AFM Book Keeping and Accounting
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 65 rapid-fire Q&A cards.
What is the primary objective of book-keeping in banking?
The primary objective of book-keeping is to maintain a systematic, chronological record of all financial transactions so that the financial position and profitability of the bank can be ascertained at any point in time.
What is the golden rule for personal accounts in double-entry bookkeeping?
Debit the receiver, credit the giver.
What distinguishes book-keeping from accounting?
Book-keeping is the mechanical process of recording transactions in books of accounts, while accounting involves summarising, interpreting, and communicating financial information derived from those records.
What is the golden rule for real accounts in accounting?
Debit what comes in, credit what goes out.
What is the meaning of a 'journal' in accounting?
A journal is the book of original or prime entry where transactions are first recorded in chronological order before being posted to the ledger, following the double-entry system.
What is the golden rule for nominal accounts in accounting?
Debit all expenses and losses, credit all incomes and gains.
What does the double-entry system of book-keeping state?
The double-entry system states that every business transaction has a dual effect — for every debit entry in one account, there must be a corresponding and equal credit entry in another account, keeping the accounting equation balanced.
What is a narration in a journal entry?
Brief explanation written below each journal entry.
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