JAIIB Exam 2025 – AFM Important Questions MCQs Quiz-5

11/02/2025

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JAIIB Exam 2025 AFM Important Questions MCQs Quiz-4

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 statements about a trial balance is TRUE?
A) A trial balance guarantees that all transactions have been recorded correctly and completely.
B) A trial balance is prepared only at the end of the financial year.
C) A trial balance helps detect certain types of errors but cannot identify all accounting mistakes.
D) A trial balance is a financial statement that reflects the financial position of a business

Q.2 Which of the following is the correct sequence for preparing a Gross Trial Balance?
A) Write account names → Enter debit & credit totals → Take totals of debit & credit columns → Total the debit & credit sides → Consider a specific date
B) Take totals of debit & credit columns → Record cashbook receipts & payments → List account names → Enter debit & credit totals → Total the debit & credit sides as of a specific date
C) Enter debit & credit totals → Write account names → Take cashbook receipts & payments → Total debit & credit columns → Choose a specific date
D) List account names → Record cashbook transactions → Take debit & credit totals → Choose a specific date → Total debit & credit columns

Q 3 What is the key characteristic of a Net Trial Balance?
A) It lists only the debit balances of all accounts.
B) It includes both gross and net balances of accounts.
C) It records only the credit balances of nominal accounts.
D) It presents only the net balances of each account,showing either a debit or credit balance.

Q.4 Which of the following statements about errors of omission is CORRECT?
A) A complete omission of a transaction affects the trial balance.
B) A partial omission of a transaction does not affect the trial balance.
C) A complete omission occurs when a transaction is not recorded at all in the books of accounts.
D) A partial omission occurs when a transaction is recorded in the books but is posted twice.

Q.5. ABC Ltd. purchased goods worth ₹50,000 on credit from XYZ Traders. The transaction was recorded in the purchase journal but was not posted to XYZ Traders’ account in the ledger. What type of error is this, and how does it affect the trial balance?
A) Complete omission – The trial balance remains unaffected.
B) Partial omission – The trial balance will not tally.
C) Compensating error – The trial balance will still agree.
D) Error of principle – The trial balance will disagree

Q.6. A credit sale of goods to Mr. Sanjay for ₹8200 was correctly recorded in the sales journal. However, while posting to Sanjay’s account, it was recorded as ₹2800.
What type of accounting error is this, and how does it affect the trial balance?
A) Error of principle – The trial balance remains unaffected.
B) Error of omission – The trial balance remains unaffected.
C) Error of commission – The trial balance will not tally.
D) Compensating error – The trial balance will still agree.

Q.7. Which of the following statements about errors of commission is TRUE?
A) Errors of commission only occur when an entry is completely omitted from the books.
B) Errors of commission can result from incorrect posting, totaling, or balancing of accounts.
C) Errors of commission do not affect the trial balance in any situation.
D) Errors of commission involve recording a transaction under the wrong accounting principle.

Q.8. Which of the following is an example of a compensating error?
A) ₹500 was recorded as ₹5,000 in the purchases book.
B) ₹2,000 rent expense was omitted from the books entirely.
C) Sales were undercast by ₹1,500, while wages were overcast by ₹1,500.
D) A credit sale of ₹750 was posted to the wrong customer’s account.

Q.9 Which of the following is an example of an error of principle?
A) Machinery purchased on credit was wrongly recorded in the purchase journal.
B) A credit sale to Mr. X was completely omitted from the books.
C) ₹5,000 was posted to the wrong side of the ledger account.
D) A total of ₹10,000 in the sales journal was incorrectly added as ₹1,000.

Q.10 Which of the following is TRUE about one-sided errors?
A) One-sided errors affect two or more accounts and require a journal entry for rectification.
B) One-sided errors are found before preparing the trial balance and can be corrected by adjusting only one account.
C) One-sided errors do not affect the trial balance and do not require any rectification.
D) One-sided errors arise only when a transaction is completely omitted from the book

Q11 Which of the following is TRUE about two-sided errors?
A) Two-sided errors affect only one account and can be corrected without a journal entry.
B) Two-sided errors require a rectification entry because both debit and credit accounts are affected.
C) Two-sided errors do not affect the trial balance and do not require correction.
D) Two-sided errors occur only when an entry is completely omitted from the books.

Q12 Which of the following statements about a Suspense Account is CORRECT?
A) A Suspense Account is opened when the trial balance does not tally, and it is closed once errors are rectified.
B) A Suspense Account is used to permanently record unidentified transactions in the books.
C) A Suspense Account is only used for two-sided errors.
D) A Suspense Account eliminates the need for rectification of errors in accounting.

Q 13 Which of the following statements is TRUE regarding rectification of errors before and after the preparation of final accounts?
A) Errors detected before the final accounts are prepared must be corrected using a Profit and Loss Adjustment Account.
B) If a trial balance difference remains unresolved, it is ignored while preparing the balance sheet.
C) Personal account balances (customers and suppliers) are carried forward to the next year, while nominal accounts are closed to the Profit and Loss Account.
D) Nominal account errors from the previous year can be adjusted in the current year’s Profit and Loss Account.

Q 14 Which of the following statements about adjusting entries is CORRECT?
A) Adjusting entries are passed before preparing the trial balance to ensure all accounts are balanced.
B) Adjusting entries are required to record outstanding expenses, accrued incomes, prepaid expenses, and unearned incomes.
C) Adjusting entries are only made when errors are found in the accounts.
D) Adjusting entries are recorded in the balance sheet instead of the trading and profit & loss account.

Q 15 Which of the following statements about closing entries is CORRECT?
A) Closing entries are used to transfer the balances of nominal accounts to the trading and profit & loss account.
B) Closing entries are passed to carry forward income and expense balances to the next accounting year.
C) Closing entries are required to adjust outstanding expenses and prepaid incomes.
D) Closing entries are recorded in the balance sheet to finalize the financial position of the business.