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JAIIB · Accounting & Financial Management · Module D — Cost Management Accounting and Taxation

JAIIB AFM Unit 31 — An Overview of Cost and Management Accounting: 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 31 — An Overview of Cost and Management Accounting (Module D — Cost Management Accounting and Taxation). The Mock Centre holds 23 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 D23 MCQs in the Mock Centre5 free belowPaper on 28 November 2026

Key facts examiners test from this unit

  1. Three branches of accounting: financial (outsiders, statutory), cost (product/service cost), management (internal decisions, widest scope).
  2. Cost accounting arose in the industrial revolution to control product costs; financial statements serve OUTSIDE stakeholders; cost/management information serves INTERNAL managers.
  3. Direct costs = traceable to a product (material, labour); their total = PRIME COST.

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
The three branches of accounting are:
Why (b): The discipline splits into FINANCIAL (external reporting), COST (cost ascertainment/ control) and MANAGEMENT accounting (decision support).
Question 2 of 5
Financial accounting information is mainly meant for:
Why (b): Financial statements serve OUTSIDERS: shareholders, lenders, government.
Question 3 of 5
Indirect costs are collectively called:
Why (b): Costs not traceable to a single unit — indirect material, labour and expenses — are OVERHEADS (factory, office, selling).
Question 4 of 5
The identifying mark of a DIRECT cost is that it:
Why (a): Direct = traceable to the cost unit (leather in a shoe, the cobbler's wages on it).
Question 5 of 5
Which of the following can be a cost unit?
Why (d): Any sensible output measure works: tonne, kWh, patient-day, passenger-km, per account — chosen to suit the industry.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Financial accountingManagement accountingOutsiders/statutory vs internal/free-form
Direct costIndirect costTraceable to product vs overhead
Practise all 23 questions on Unit 31. 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 30: Goods and Services Tax · Unit 32: Costing Methods → · 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.