JAIIB Paper 3 Mock 5

A company changes an accounting policy only when required by a standard or when the change provides reliable and more relevant information. This approach is consistent with:

An accountant does not separately disclose a very small immaterial stationery item in the same manner as a major litigation exposure. Which concept is being applied?

A change in the estimated residual value of equipment normally affects depreciation:

A debtor pays ₹19,500 in full settlement of a ₹20,000 balance. The correct entry includes:

A branch gives its petty cashier an authorised float of ₹4,000. Supported vouchers total ₹2,700 and cash left is ₹1,300. Under imprest accounting, what reimbursement restores the float to its authorised level?

A nominal account with an expense balance is normally closed at period-end by transferring it to:

The cash book shows a bank overdraft of ₹26,000. A cheque issued for ₹4,500 has not yet been presented. Ignoring other items, the bank statement overdraft is:

A customer directly deposits ₹8,200 into the bank account, but the business has not recorded it. Before preparing a reconciled balance, the cash book should be:

Purchase of a new delivery van is debited to motor expenses instead of a vehicle asset. This is primarily:

After investigation, a suspense-account debit is traced to an expense omitted from the ledger. The correction should:

A machine is acquired for ₹5,00,000; installation costs ₹30,000 and staff training costs ₹12,000. Assuming installation is necessary to make it operational, the initial asset cost is generally:

An asset has a carrying amount of ₹1,50,000 at the start of the year. Depreciation is 20% per annum on WDV. The year’s depreciation is:

When a depreciable asset is sold, the gain or loss is generally determined by comparing sale proceeds with:

When inventory cost exceeds net realisable value, inventory is generally measured at:

A bill is discounted with a bank before maturity. The drawer receives proceeds after deducting:

A restrictive endorsement such as “Pay X only” principally:

A bank’s accrued interest expense on deposits at year-end has not yet been paid. Under accrual accounting, the bank should generally:

A long-outstanding reconciling item in a bank account should first trigger:

A branch sends cash to head office. In the branch books, the transfer is normally recorded by:

An auditor selects transactions for testing rather than examining every transaction. The risk that the sample leads to a different conclusion from a full examination is:

Checking that recorded loan advances actually exist most directly tests the assertion of:

A concurrent audit is primarily intended to provide:

The primary purpose of financial-statement notes is to:

A business receives an advance from a customer for services to be performed next month. At receipt, the amount is generally recognised as:

A material prior-period error is discovered after financial statements were issued. Under a retrospective-restatement framework, the entity generally:

A bank loan repayable in full within the normal operating cycle is generally classified based on:

Closing inventory is omitted from the trial balance but is given as an adjustment. In traditional final-account preparation, it is generally shown:

A company allots shares with a nominal value of ₹10 for ₹13 each. How is the ₹3 excess per share over nominal value described?

Amount called on shares but not paid by a shareholder is known as:

A cumulative preference share generally gives its holder a right to:

Under the indirect method, depreciation is usually added back to profit because it is:

A manufacturer settles an invoice for a new long-term production machine. In the statement of cash flows, this cash payment is normally classified as which type of activity?

An analyst compares two balance sheets and prepares a traditional funds-flow statement to explain sources and applications that changed the firm’s short-term financial position. Its central focus is the change in:

A bank owes balances to depositors in savings, current and fixed-deposit accounts. In the bank’s statement of financial position, these amounts are normally shown as:

Interest earned on advances is ordinarily recognised as:

For an account classified as a non-performing asset, recognition of interest income is governed primarily by:

A provision for a probable, reliably estimable obligation is distinguished from a contingent liability because a provision is generally:

Pillar 3 disclosures under the Basel framework primarily aim to strengthen:

A parent generally consolidates an entity when it has:

A short-term investment normally qualifies as a cash equivalent when it is highly liquid, readily convertible to a known amount of cash and:

A maker-checker control in a computerised accounting system is designed mainly to:

A core banking system enables a customer’s account to be serviced across branches because it generally uses:

A suspense balance in a bank’s general ledger should be:

A material contingent liability is ordinarily:

A capital reserve generally arises from:

Forfeiture of shares for non-payment of calls is carried out according to:

Automated reconciliation software is most effective when unmatched items are supported by:

Expected credit loss estimates, where the relevant accounting framework applies, depend materially on:

A sharp increase in a bank’s operating expenses without a comparable increase in operating income is likely to worsen its:

When material uncertainties cast significant doubt on going concern, management should generally:

For a listed company, shareholder-wealth maximisation is most directly linked to:

A business reports ₹9,60,000 in current assets and ₹4,80,000 in obligations due within the operating cycle. What is the ratio of current assets to current liabilities?

Current assets ₹8 lakh include inventory of ₹2.5 lakh and prepaid expenses of ₹0.5 lakh. Current liabilities are ₹5 lakh. The quick ratio is:

A firm has total interest-bearing debt of ₹12 crore and shareholders’ funds of ₹8 crore. Debt-equity ratio is:

EBIT is ₹18 lakh and capital employed is ₹1.2 crore. ROCE is:

An investor places ₹80,000 in a two-year deposit earning 10% per annum, with annual compounding and no interim withdrawal. What is the maturity amount?

A lender quotes 12% nominal annual interest and credits interest monthly at one-twelfth of that rate. What is the approximate effective annual yield after monthly compounding?

At a discount rate of 10%, the present value of ₹1,21,000 receivable after two years is:

Three year-end deposits of ₹10,000 each earn 10% annually. Calculate the accumulated value immediately after the third deposit is made, with the first two deposits earning interest for the intervening periods.

A borrower pays equal monthly instalments on a fully amortising loan whose rate does not change. As each instalment reduces the outstanding principal, what usually happens to the interest charged in later instalments?

A bond’s coupon rate is below the market yield for comparable risk and maturity. It will generally trade:

A bond with annual coupon ₹700 trades at ₹8,750. Its current yield is:

When assessing a fixed-coupon bond, an analyst weights each promised cash-flow date by that cash flow’s present value as a proportion of the bond price. The resulting weighted-average time measure is called:

A bank quotes USD/INR 83.20/83.25. A customer buying USD from the bank would ordinarily transact at:

If EUR/USD = 1.10 and USD/INR = 84.00, the implied EUR/INR rate, ignoring spreads, is:

Spot USD/INR is 83.00 and the six-month forward rate is 84.66. Ignoring day-count variations, the annualised forward premium is approximately:

A project costs ₹5 lakh and generates present values of future net cash inflows totalling ₹5.6 lakh. Its NPV is:

A project requires ₹4,00,000 and produces uniform annual cash inflows of ₹1,00,000. Its simple payback period is:

For a conventional independent project, if its IRR exceeds the required rate of return, the project is generally:

Market-value financing weights are 60% ordinary equity and 40% debt. The cost of equity is 14%, while the debt cost after tax is 8%. Calculate the weighted average cost of capital.

Firm A leases expensive production facilities and employs salaried plant supervisors, so its fixed operating costs are high relative to variable costs. Compared with an otherwise similar firm, Firm A is likely to exhibit:

A company holds inventory for an average of 45 days, waits 30 days to collect credit sales and takes 25 days to pay suppliers. Using inventory days plus receivable days minus payable days, calculate the cash-conversion cycle.

In a factoring arrangement, the factor typically provides services relating to:

Under a standard fixed-for-floating interest-rate swap, two firms calculate periodic payments using the same notional principal. What is normally exchanged between the counterparties?

A call option with strike ₹100 when the underlying share trades at ₹115 is:

For a tax year beginning on 1 April 2026, the principal statute governing income tax is generally the:

A return filed in 2026 for a tax period governed by the earlier law must be handled by considering:

TDS deducted from a payment is generally credited to the recipient’s tax account when:

Tax collected at source differs from TDS principally because TCS is collected by the specified seller/collector on:

Advance tax is generally intended to ensure income tax is paid:

A deductible temporary difference may give rise to a deferred tax asset when:

For an inter-State taxable supply, the tax component generally includes:

A taxpayer under a composition scheme generally cannot:

In cost accounting, a cost object is:

Wood used specifically to manufacture a particular table is normally:

Before a production period starts, the cost accountant estimates factory overhead and expected machine hours to assign indirect production cost to output. Which calculation gives the predetermined machine-hour absorption rate?

Budgeted machine-related overhead is ₹3,60,000 and budgeted machine hours are 12,000. The overhead rate per machine hour is:

Batch costing is especially suitable when:

A process produces an abnormal loss. Under a standard process-costing approach, abnormal loss is generally:

A by-product with relatively low value may be accounted for by crediting its net realisable value against:

Standard hours for actual output are 900 hours; actual hours are 960; standard wage rate is ₹250 per hour. Labour efficiency variance is:

Actual quantity purchased is 2,000 kg; standard price is ₹40/kg and actual price is ₹42/kg. Material price variance is:

A budget expected 5,000 units at a contribution of ₹50 each. Actual sales were 5,400 units. Contribution-based sales-volume variance is:

A product line generates revenue of ₹12,00,000 and incurs variable costs of ₹7,20,000. What percentage of sales is contribution available to cover fixed costs and profit?

Actual sales are ₹15 lakh and break-even sales are ₹12 lakh. Margin of safety as a percentage of actual sales is:

If fixed costs remain unchanged and contribution per unit rises, break-even volume will generally:

A cost budgeted as ₹8 per unit for 10,000 units is compared with actual activity of 12,000 units. The flexible budget for this variable cost is:

A department prepares its annual spending plan by linking each allocation to a programme, its objectives and intended results, rather than simply repeating last year’s expense headings. Which budgeting method is being used?

Cost audit is primarily concerned with examining:

Where cost accounts and financial accounts are maintained separately, a reconciliation statement explains: