JAIIB Paper 3 Module B Quiz 5

The difference is ₹8,40,000 − ₹8,20,000 = ₹20,000. The disagreement requires investigation before final accounts are prepared.

Closing retained earnings = opening retained earnings + profit − dividends = ₹3,00,000 + ₹1,20,000 − ₹30,000 = ₹3,90,000, ignoring other movements.

Subscribed capital represents the amount of issued share capital that investors have agreed to take up. The amount paid may be less than the subscribed amount if calls remain unpaid.

Non-voting shares carry restricted or no voting rights under their terms and the applicable legal framework. Other economic rights depend on the class terms and relevant law.

Depreciation reduces accounting profit but does not itself use cash in the period. Under the indirect method, it is added back when reconciling profit to operating cash flow.

Deposits are amounts the bank owes to customers and are therefore liabilities. The exact presentation follows the prescribed banking financial statement format.

Interest paid on deposits and borrowings is a funding expense. Loan principal disbursement generally creates a loan asset rather than an immediate expense, subject to subsequent impairment and other accounting treatment.

Role-based access control applies least privilege, limiting users to authorised functions. It reduces exposure from mistakes, misuse and compromised accounts.

Change management reduces the risk that software or configuration changes cause incorrect accounting or service disruption. Testing, approvals, documentation and rollback arrangements are standard safeguards.

Profit increases retained earnings, while dividends and losses reduce it. Other changes may also affect retained earnings under the applicable framework.

Reconciliation between detailed account records and general-ledger control accounts can identify mismatches and ensure customer balances and financial reporting records align.

The statement of changes in equity explains movements in share capital, reserves, retained earnings and other equity components over the period.

Periodic access reviews ensure that users retain only authorised privileges, particularly after transfers, role changes or departures. This limits unauthorised transactions and data access.

Lenders use financial statements to assess repayment capacity, leverage and risk. Other external users include investors, suppliers and regulators.

When a company borrows cash, cash (asset) increases and borrowing (liability) increases by the same amount. Paying a payable reduces both cash and liabilities; buying equipment for cash swaps assets.

Share premium/securities premium is credited when issue price exceeds nominal value. Its use is regulated by applicable company law; it is not ordinary sales revenue or unrestricted cash profit.

Notes provide additional details and explanations needed to understand the main statements, including accounting policies, asset classifications, commitments, contingencies and prescribed regulatory disclosures.

Bank financial statements are subject to applicable statutory audit and legal/regulatory disclosure requirements. Regulation does not remove the need for reliable statements and audit.

Computerised accounting improves speed and reporting but remains dependent on accurate input, suitable configuration, access controls, audit trails and reconciliation. Manual systems also require controls.

Profit is affected by interest expense, operating expenses, provisions and other income/expense items. Deposits are liabilities, loans generally create assets, and share capital is equity.