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

JAIIB AFM Unit 35 — Budgets and Budgetary Control: 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 35 — Budgets and Budgetary Control (Module D — Cost Management Accounting and Taxation). The Mock Centre holds 39 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 D39 MCQs in the Mock Centre5 free belowPaper on 28 November 2026

Key facts examiners test from this unit

  1. Budget = a plan expressed in QUANTITATIVE/monetary terms, prepared and approved PRIOR to the period; a forecast merely predicts — a budget commits.
  2. Budgeting = the whole process of designing, implementing and operating budgets (Rowland & William: budgets are means, budgeting the process, budgetary control the end).
  3. Functional budgets (sales, production, cash…) consolidate into the MASTER budget; the KEY (principal) budget factor — usually SALES — is built first; production budget flows from the sales budget.

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 budget is a plan expressed in:
Why (c): Budgets speak both languages: rupees (cash, cost budgets) AND units (production, material budgets).
Question 2 of 5
A budget is normally prepared and approved:
Why (b): A plan must precede the action it plans — budgets are set and sanctioned BEFORE the period begins.
Question 3 of 5
The coordinated consolidation of all functional budgets is the:
Why (b): The MASTER budget stitches sales, production, cash and the rest into one summary plan (budgeted P&L and balance sheet).
Question 4 of 5
'Budgetary control' most accurately means:
Why (b): The loop: plan → measure → compare → correct — budgets are the yardstick, comparison the discipline, action the point.
Question 5 of 5
A budget prepared for one SPECIFIC activity is called a:
Why (a): A programme budget rings-fences one activity/scheme — its costs, funding and expected results in one frame.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
BudgetForecastCommitment approved in advance vs mere prediction
BudgetBudgetingThe plan vs the process (budgetary control = the end)
Practise all 39 questions on Unit 35. 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.