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JAIIB · Accounting & Financial Management · Module A — Basic Accounting and Finance

JAIIB AFM Unit 1 — Definition, Scope and Accounting Standards: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 3 of the November 2026 cycle (28 November 2026)

This page is a free slice of our JAIIB AFM question bank for Unit 1 — Definition, Scope and Accounting Standards (Module A — Basic Accounting and Finance). The Mock Centre holds 150 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

AFM · Module A150 MCQs in the Mock Centre5 free belowPaper on 28 November 2026

Key facts examiners test from this unit

  1. AICPA gave the classic definition of accounting — "the art of recording, classifying and summarising... and interpreting the results thereof."
  2. ASB constituted by ICAI on 21 April 1977; ICAI has issued 29 mandatory + 3 non-mandatory AS (AS 6 & AS 8 withdrawn).
  3. NACAS (15 June 2001) → replaced by NFRA under Section 132, Companies Act 2013, effective 1 October 2018.

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
Under fair value accounting, which approach is NOT used to derive fair value?
Why (d): The three approaches to derive fair value are Market, Income and Cost. There is no 'barter approach' — barter is a mode of exchange, not a valuation method.
Question 2 of 5
A bank studies a borrower company's balance sheet before taking a credit decision. This illustrates which feature of accounting?
Why (c): The notes use exactly this example for feature 4: accounting interprets financial data, helping future decisions — a bank studies the balance sheet before a credit decision.
Question 3 of 5
Which of the following is NOT one of the fundamental accounting assumptions under AS 1?
Why (d): AS 1's three fundamental assumptions: going concern, consistency, accrual (mnemonic: GCA).
Question 4 of 5
The origin of accounting is best described as:
Why (b): Accounting is as old as money, and record-keeping existed even under barter (ancient Greek, Roman, Egyptian and Babylonian records).
Question 5 of 5
Which of the following is an INTERNAL user of accounting information?
Why (b): Management uses accounting data internally for decisions like pricing, make-or-buy and discounts.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
BookkeepingAccountancyAccountancy = bookkeeping + compilation; accountancy is wider
ComparabilityConsistencyBetween enterprises vs same enterprise across periods
Practise all 150 questions on Unit 1. The free demo opens a slice of every subject with the same explanations; the AFM Online-only pass unlocks all 1,681 AFM questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
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Unit 2: Basic Accountancy Procedures → · All AFM units · JAIIB 2026 guide

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Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.