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JAIIB AFM Unit 14 — Company Accounts I: 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 14 — Company Accounts I (Module B — Preparation of Financial Statements). The Mock Centre holds 51 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 B51 MCQs in the Mock Centre5 free belowPaper on 28 November 2026

Key facts examiners test from this unit

  1. Sec 2(20) defines a company; separate legal entity + perpetual succession; common seal OPTIONAL since 2015; NO minimum paid-up capital.
  2. Private company max 200 members; Government company ≥51% government-held; statutory (FCI) vs chartered vs registered.
  3. Holding Sec 2(46); subsidiary Sec 2(87) (Board control or >½ capital); guarantee companies for non-profits.

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
A shareholder's death does not affect the company because of its:
Why (b): PERPETUAL SUCCESSION: the company is an artificial legal person — members may come and go, the company continues.
Question 2 of 5
The liability difference between a partnership and a company is:
Why (b): Partnership liability is UNLIMITED (personal assets exposed); a company member's liability is normally limited to the unpaid amount on his shares — the key reason companies suit large ventures.
Question 3 of 5
The share capital of a company limited by shares can be of which kinds?
Why (b): Two kinds only: EQUITY shares and PREFERENCE shares (Companies Act 2013).
Question 4 of 5
When applications received exceed the shares offered, it is called:
Why (b): Applications EXCEEDING the offer = OVERSUBSCRIPTION — allotment then follows a basis of allotment (pro-rata etc.).
Question 5 of 5
Apart from limited liability, a company scores over a partnership because:
Why (a): The company form suits large ventures (a cement factory, a steel plant): perpetual succession, free transferability of shares, and access to public capital markets.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Statutory companyChartered companySpecial Act of Parliament (FCI, RBI) vs royal charter (East India Co.)
Holding companySubsidiary companyControls (Sec 2(46)) vs is controlled (Sec 2(87))
Practise all 51 questions on Unit 14. 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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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.