JAIIB · Accounting & Financial Management · Module B — Preparation of Financial Statements
JAIIB AFM Unit 17 — Final Accounts of Banking Companies: 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 17 — Final Accounts of Banking Companies (Module B — Preparation of Financial Statements). The Mock Centre holds 48 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 B48 MCQs in the Mock Centre5 free belowPaper on 28 November 2026
Key facts examiners test from this unit
Banking defined in Sec 5(b), BR Act 1949; accounts per Sec 29-32 in the THIRD SCHEDULE: Form A (Balance Sheet) + Form B (P&L); books close 31 March; figures in nearest thousands.
Schedule map: 1 Capital · 2 Reserves & Surplus · 3 Deposits · 4 Borrowings · 5 Other Liabilities (incl. Rebate on Bills) · 6 Cash & RBI balances · 7 Balances with banks/money at call · 8 Investments · 9 Advances · 10 Fixed Assets · 11 Other Assets · 12 Contingent Liabilities; P&L: 13 Interest Earned · 14 Other Income · 15 Interest Expended · 16 Operating Expenses; 17 Accounting Policies · 18 Notes (28 heads).
Interest Expended (Sch 15) is NOT an operating expense (Sch 16) — the unit's biggest trap; no 'To/By' in bank P&L; no P&L Appropriation account (transfers straight to balance sheet).
Law update, September 2026. RBI's Master Direction on Classification, Valuation and Operation of Investment Portfolio (12 September 2023, effective 1 April 2024) removed the flat 25% HTM ceiling and the 90-day HFT holding rule: HTM now has sale restrictions rather than a percentage cap, and HFT sits inside the FVTPL category. The textbook still keys the earlier figures — follow them for the exam unless a question says 'under the current norms'.
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 bank's final accounts are prepared in which formats?
Why (b): Form A (balance sheet) and Form B (P&L) of the THIRD SCHEDULE, BR Act 1949 — banks are exempt from Companies Act Schedule III.
Question 2 of 5
A banking company normally closes its books on:
Why (c): Banking books close on 31 MARCH — aligned with the fiscal year.
Question 3 of 5
Deposits appear in which schedule of a bank balance sheet?
Why (b): NPA income is recognised only on ACTUAL RECEIPT — cash basis; accrual stops on classification.
0 of 5 answered.
Traps in this unit
Confusable A
Confusable B
The difference
Schedule 15
Schedule 16
Interest Expended (separate line) vs Operating Expenses — never merged
Schedule 10
Schedule 11
Fixed Assets vs Other Assets
Practise all 48 questions on Unit 17. 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.
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.
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