JAIIB Exam 2025 – AFM Important Questions MCQs Quiz-2

07/02/2025

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JAIIB Exam 2025 AFM Important Questions MCQs Quiz-2

JAIIB Exam Quiz 2025: The JAIIB exam is scheduled for 2025 by IIBF. Here, we are providing JAIIB AFM MCQ-based quizzes on a regular basis. You can attempt the quizzes regularly to prepare for the upcoming JAIIB exam. The quizzes will be provided module-wise and unit-wise. You can attempt the JAIIB AFM quizzes from the links below and improve your preparation by practicing regularly. These quizzes will help you boost your score in the JAIIB exam and guide you to clear the exam on your first attempt.

Q.1. Which of the following best describes accounting principles?
A) Arbitrary rules set by individual businesses
B) Scientifically laid down standards ensuring uniformity in accounting
C) Guidelines that vary based on managerial preferences
D) Informal methods used for internal reporting

Q.2. Which of the following statements best reflects the cost concept in accounting?
A) Business transactions are recorded at their historical cost, including purchase price and necessary expenses
B) Assets are recorded at their current market value to reflect realtime financial position.
C) The value of assets is periodically adjusted based on inflation and market trends.
D) Unrealized gains from asset appreciation are recognized in the financial statements

Q 3. Which of the following is NOT an implication of the cost concept in accounting?
A) Fixed assets are recorded at their historical cost, not market value.
B) Unrealized gains from asset appreciation are ignored.
C) Transactions are recorded based on future expected values.
D) An item without a cost is not recorded in the books

Q.4. Which of the following statements is true according to the money measurement concept?
A) Only transactions measurable in monetary terms are recorded in accounting.
B) Employee skills and brand reputation are recorded as assets in the books of accounts.
C) The effect of inflation is always considered while valuing assets.
D) Non-financial factors like managerial efficiency are included in financial statements.

Q.5. According to the money measurement concept, which of the following transactions will NOT be recorded in the books of accounts?
A) A company purchases machinery worth ₹10 lakh.
B) A firm pays ₹5 lakh as employee salaries.
C) The CEO’s leadership skills significantly improve company performance.
D) A business sells goods worth ₹2 lakh

Q.6 According to the business entity concept, how is the capital contributed by the owner treated in the books of accounts?
A) As an income for the business
B) As an asset of the business
C) As a liability of the business
D) As an expense of the business

Q.7. Which of the following best explains the importance of the business entity concept?
A) It ensures that the personal and business transactions of the owner are recorded together.
B) It treats the business as a separate legal entity, distinct from its owner.
C) It allows personal expenses of the owner to be included in business accounts.
D) It eliminates the need to differentiate between revenues and expenses

Q.8. According to the realisation concept, when is revenue considered as earned?
A) When the order for goods is received
B) When the goods are manufactured
C) When the ownership of goods is transferred to the buyer, and they become legally liable to pay
D) When payment is received from the buyer

Q.9 How should goods sold on approval basis be recorded as per the realisation concept?
A) As sales revenue at the time of sale
B) As an expense in the profit and loss account
C) At cost until the buyer approves the purchase
D) As profit at the time of sale

Q.10 Which of the following best describes the dual aspect concept?
A) Every transaction affects at least two accounts, one debited and one credited.
B) Only cash transactions are recorded in the books of accounts.
C) Transactions are recorded only when cash is received.
D) Future income and expenses are always considered while recording transactions

Q.11. According to the historical records concept, when should a business transaction be recorded?
A) When it is expected to happen in the future
B) When the transaction has taken place and can be verified
C) When the owner decides to record it
D) When an estimate of the transaction value is available

Q.12 Which of the following is a direct implication of the going concern concept in accounting?
A) All business activities are assumed to cease at the end of each year.
B) Future liabilities are not considered in financial statements.
C) Depreciation is calculated over the expected useful life of an asset, assuming the business will continue.
D) Income is only recognized when the payment is received

Q.13 What is the main purpose of the matching concept in accounting?
A) To match income with future expenses
B) To match the expenses of a period with the income earned during the same period
C) To record revenues before any related expenses are incurred
D) To match the expenses with the future revenues they will generate

Q.14 What is the primary reason for using an accounting period in business reporting?
A) To record all transactions as they happen without any intervals
B) To provide periodic financial information to external stakeholders, such as investors and regulators
C) To track a business’s performance over an indefinite time frame
D) To avoid the complexity of recording financial results for short periods

Q.15 What is the role of the convention of full disclosure in financial reporting?
A) To ensure that only the most profitable transactions are recorded.
B) To prevent any loss-making activities from being disclosed.
C) To require that all material facts and activities of the business are fully disclosed in the financial statements.
D) To conceal any reserves or liabilities that could harm the company’s image.

Q.16 What determines whether an item is considered “material” under the convention of materiality?
A) The amount of tax paid by the company
B) The size of the company and the overall profits
C) The value of the item and the circumstances of the individual business case
D) The public interest in the company’s financial records

Q.17 What does the convention of conservatism (prudence) primarily require in accounting?
A) All anticipated profits should be recognized immediately.
B) Possible losses should be considered, while anticipated profits should be ignored.
C) Only the actual losses are recorded, without any provisions for future losses.
D) Profits and losses should be recorded only after cash is received or paid

Q.18 What does the revenue recognition and realisation concept prevent in accounting?
A) It prevents businesses from recording future expenses.
B) It prevents businesses from inflating profits by recording expected incomes or gains.
C) It requires businesses to record only cash transactions.
D) It allows businesses to recognize revenue as soon as a sale agreement is signed.

Q.19 Under the accrual concept, when should an expense be recorded?
A) Only when the cash payment is made for the expense.
B) When the payment is due, regardless of when it is paid.
C) When the expense is paid in advance, it is recognized as an expense.
D) When the revenue related to the expense is received