Preparing for the JAIIB 2026 AFM exam can feel overwhelming because the syllabus is vast. The good news is that over the years, certain topics keep appearing repeatedly, even if the questions themselves are different. This means if you focus on these high-frequency topics, you can maximize your score efficiently. To make your preparation easier, we have compiled a list of AFM topics, along with a PDF download for quick revision.
Download the JAIIB AFM PDF Covering Questions from Most Repetitive Topics
The direct link to download the JAIIB AFM questions from the most repetitive topics are as follows:
What are the common repetitive topics in JAIIB AFM paper?
The JAIIB AFM exam consistently repeats certain topics every year. These topics form the core of financial management, banking practices, and regulatory frameworks. Focusing on these areas ensures that you cover most of the questions that appear in the exam. Candidates who revise these topics thoroughly often score well.
- Financial Management Basics – Principles, objectives, and key functions.
- Ratio Analysis – Liquidity, profitability, solvency, and leverage ratios.
- Capital Budgeting – NPV, IRR, Payback Period, and project evaluation methods.
- Funds Flow & Cash Flow Statements – Preparation, analysis, and interpretation.
- Working Capital Management – Components, optimization, and management techniques.
- Banking & Financial Institutions – RBI guidelines, credit appraisal, regulatory frameworks.
- Costing & Budgeting – Standard costing, variance analysis, budget preparation.
- Accounting Standards & Recent Updates – Key notifications, regulatory changes, circulars.
- Investment Appraisal & Project Finance – Evaluation of investments, loan appraisal, feasibility studies.
- Financial Markets Basics – Money market, capital market, and instruments.
20 JAIIB AFM Questions from the Most Repetitive Topics
Q1. [Conceptual]
A firm debited the purchase of a new delivery van (cost ₹8,00,000) to the ‘Repairs and Maintenance’ expense account. The trial balance tallied despite this error. Which type of error is this, and how will it affect the financial statements?
- A. Error of omission – no effect on profit
- B. Error of principle – understates profit and overstates expenses
- C. Compensating error – auto-corrects in next period
- D. Error of commission – only affects balance sheet
Correct Answer: Option B
Explanation:
Q2. [Numerical]
A company’s cash book shows a bank balance of ₹4,75,000 (Dr). The following items are noted:
- • Cheques issued but not presented: ₹62,000
- • Cheques deposited but not yet credited by bank: ₹45,000
- • Bank charges debited in pass book only: ₹3,500
- • Interest credited directly by bank (not in cash book): ₹8,500
What is the balance as per the pass book?
- A. ₹4,73,000
- B. ₹4,64,000
- C. ₹4,83,000
- D. ₹4,55,000
Correct Answer: Option A
Q3. [Conceptual]
Which of the following best describes the purpose of adjusting entries at year-end?
- A. To record transactions omitted from the cash book
- B. To align revenues and expenses with the accounting period under the accrual concept
- C. To detect and rectify errors in the trial balance
- D. To reclassify capital expenditures as revenue expenditures
Correct Answer: Option B
Q4. [Case Study]
CASE: Rahul & Co. found the following after its trial balance tallied:
- (i) ₹1,20,000 paid for machinery was debited to Wages account.
- (ii) Sales of ₹30,000 to Mr. X were posted to Mr. Y’s account.
- (iii) Purchases of ₹50,000 were omitted entirely from books.
- (iv) Discount allowed ₹5,000 was not posted to the Discount account.
Which errors will NOT be revealed by the trial balance?
- A. Only (i) and (ii)
- B. Only (iii) and (iv)
- C. All four errors
- D. (i), (ii), and (iii) only
Correct Answer: Option C
Q5. [Numerical]
A firm purchased machinery costing ₹10,00,000 on 1st April. Depreciation is charged at 15% p.a. under the Written Down Value (WDV) method. What will be the book value of the asset at the end of Year 3?
- A. ₹5,50,000
- B. ₹6,14,125
- C. ₹7,22,500
- D. ₹5,00,000
Correct Answer: Option B
Q6. [Numerical]
Opening stock ₹3,00,000; Purchases ₹14,00,000; Carriage inward ₹60,000; Purchase returns ₹80,000; Closing stock ₹4,20,000; Abnormal loss (fire) ₹1,00,000. What is the correct Cost of Goods Sold (COGS)?
- A. ₹13,60,000
- B. ₹12,60,000
- C. ₹13,80,000
- D. ₹14,60,000
Correct Answer: Option A
Q7. [Conceptual]
A company changes its depreciation method from Straight-Line Method (SLM) to Written Down Value (WDV) to better reflect the pattern of economic benefits. Under accounting standards, this should be treated as:
- A. Change in accounting policy with retrospective effect
- B. Change in accounting estimate with prospective effect
- C. Correction of a prior period error
- D. An extraordinary item disclosed separately
Correct Answer: Option B
Also download the JAIIB Previous Year Papers PDF
Q8. [Numerical]
A suspense account had a debit balance of ₹6,000. The following errors were then discovered:
- (i) Wages account undercast by ₹2,000
- (ii) Sales account overcast by ₹1,500
- (iii) Purchase returns ₹2,500 completely omitted
After rectification, what is the balance in the suspense account?
- A. Nil
- B. ₹2,000 Dr
- C. ₹500 Dr
- D. ₹500 Cr
Correct Answer: Option A
Q9. [Case Study]
CASE: Priya Traders discovered the following adjustments at year end:
- • Outstanding rent ₹24,000
- • Prepaid insurance ₹9,000 (of 12 months, 3 months expired)
- • Depreciation on furniture ₹15,000 not yet recorded
- • Interest accrued on investment ₹6,000 not yet received
What is the net impact on Net Profit after all adjustments?
- A. Decrease by ₹33,000
- B. Decrease by ₹42,000
- C. Decrease by ₹24,000
- D. Decrease by ₹30,000
Correct Answer: Option A
Q10. [Conceptual]
When preparing a Bank Reconciliation Statement, a cheque deposited by the company but not yet credited by the bank will:
- A. Increase the pass book balance over cash book balance
- B. Cause the cash book balance to be higher than the pass book balance
- C. Have no effect on either balance
- D. Reduce the cash book balance
Correct Answer: Option B
Q11. [Numerical]
A company forfeited 5,000 shares of ₹10 each on which ₹7 per share had been called up (₹3 on application, ₹4 on allotment). A shareholder holding 2,000 of these shares had paid only the application money. What amount is credited to the Forfeited Shares Account for these 2,000 shares?
- A. ₹14,000
- B. ₹6,000
- C. ₹20,000
- D. ₹8,000
Correct Answer: Option B
Q12. [Numerical]
The forfeited 2,000 shares (face value ₹10 each; ₹6,000 in Forfeited Shares A/c) from Q11 are reissued at ₹8 per share as fully paid up. What amount is transferred to Capital Reserve?
- A. ₹2,000
- B. ₹4,000
- C. ₹6,000
- D. ₹10,000
Correct Answer: Option A
Q13. [Conceptual]
A company announces a bonus issue of shares by capitalising free reserves. Which of the following statements about a bonus issue is CORRECT?
- A. It increases the net worth of the company
- B. It increases cash and bank balances
- C. It results in reallocation within shareholders’ funds without changing total net worth
- D. It increases the earnings per share of existing shareholders
Correct Answer: Option C
Q14. [Numerical]
A company has a paid-up equity capital of ₹50,00,000 (₹10 each). It declares a bonus issue of 1 share for every 5 shares held. What is the amount to be transferred from reserves to paid-up capital?
- A. ₹5,00,000
- B. ₹10,00,000
- C. ₹50,00,000
- D. ₹2,50,000
Correct Answer: Option B
Q15. [Case Study]
CASE: Star Ltd. issued 10,000 equity shares of ₹10 each at ₹15 (premium ₹5). Calls were made as: Application ₹3, Allotment ₹7 (including ₹5 premium), First Call ₹5. Mr. Raj, holding 500 shares, failed to pay the first call. His shares were forfeited and later reissued to Ms. Seema at ₹12 per share as fully paid.
What is the amount credited to Capital Reserve after reissue?
- A. ₹1,000
- B. ₹2,500
- C. ₹500
- D. ₹3,500
Correct Answer: Option C
Q16. [Conceptual]
According to the Capital Asset Pricing Model (CAPM), which component specifically captures the systematic (market) risk of a security?
- A. Risk-free rate of return
- B. Market risk premium (Rm – Rf)
- C. Beta coefficient (β)
- D. Expected market return (Rm)
Correct Answer: Option C
Q17. [Numerical]
Using CAPM: Risk-free rate = 7%, Expected market return = 13%, Beta = 1.4. What is the required rate of return (cost of equity)?
- A. 13.0%
- B. 15.4%
- C. 16.2%
- D. 18.2%
Correct Answer: Option B
Q18. [Numerical]
A company’s shares have a current market price of ₹120. It paid a dividend of ₹6 per share last year, and dividends are expected to grow at 8% p.a. perpetually. What is the cost of equity using the Dividend Growth Model?
- A. 5.0%
- B. 8.0%
- C. 13.4%
- D. 13.0%
Correct Answer: Option C
Q19. [Case Study]
CASE: Metro Finance Ltd. is evaluating Project Alpha:
- • Initial Investment: ₹20,00,000
- • Annual Cash Inflows for 5 years: ₹6,00,000
- • Cost of Capital: 12%
- • PV Annuity Factor (12%, 5 yrs): 3.605
- • Management also computed IRR to be 14.5%
Which decision is theoretically most appropriate from a wealth-maximisation perspective?
- A. Reject – IRR should always be the decision criterion
- B. Accept – NPV is positive so it creates shareholder value
- C. Reject – high initial outlay makes it risky
- D. Defer – wait for better market conditions
Correct Answer: Option B
Q20. [Numerical]
A project with an initial investment of ₹15,00,000 generates uneven cash inflows: Year 1: ₹4,00,000; Year 2: ₹5,50,000; Year 3: ₹6,00,000; Year 4: ₹5,00,000. Discount factors at 10%: 0.909, 0.826, 0.751, 0.683. What is the NPV?
- A. –₹49,250
- B. +₹1,55,750
- C. +₹49,250
- D. +₹2,10,000
Correct Answer: Option C
Download JAIIB important MCQs Free PDF
Also, download the JAIIB important MCQs free PDF here:
| Study Material | Study Material |
| JAIIB IE and IFS Important Questions PDF | JAIIB PPB Important Questions PDF |
| JAIIB AFM Important Questions PDF | JAIIB RBWM Important Questions PDF |
What types of questions are mostly asked in JAIIB AFM exam?
Most questions in JAIIB AFM are conceptual, testing your understanding of financial principles and banking practices. Numerical questions are fewer and usually cover basic calculations. Scenario-based and application questions are also common, requiring interpretation and practical decision-making rather than rote learning.
- Conceptual MCQs (Very High) – Principles of finance, regulations, accounting standards, capital budgeting; focus on understanding, not memorizing.
- Numerical MCQs (Moderate) – Ratio analysis, cash flow, working capital, project appraisal (NPV, IRR); practice formulas and basic calculations.
- Scenario-based / Application (High) – Real banking situations, project evaluation, loan appraisal; read carefully and apply concepts.
- Regulatory / Update-based (Medium) – RBI guidelines, notifications, recent circulars; stay updated with current rules.
- True/False / Assertion-Reasoning (Low to Moderate) – Concept-based statements; understand the rationale behind principles.
Also Check:
| Study Plan | Study Plan |
| JAIIB IE And IFS Study Plan | JAIIB PPB Study Plan |
| JAIIB AFM Study Plan | JAIIB RBWM Study Plan |
What is the JAIIB AFM (Accounting and Financial Management) syllabus 2026?
Paper 3 of JAIIB is Accounting and Financial Management. The paper consists of a total of 4 modules as listed below:
- Accounting Principles and Processes
- Financial Statement and Core Banking Systems
- Financial Management
- Taxation and Fundamentals of Costing.
Also Check,
| Related Topics | Link |
| 50 Most Repetitive JAIIB RBWM MCQs | Click here to Check |
| 50 Most Repetitive JAIIB PPB MCQs | Click here to Check |
| 50 Most Repetitive JAIIB IE & IFS MCQs | Click here to Check |
FAQs
Financial management basics, ratio analysis, capital budgeting, and working capital.
Yes, but only 20–25% of questions, mainly ratios, cash flow, and NPV/IRR.
Yes, around 70–75% of the paper is conceptual.
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