JAIIB Paper 3 Mock 7

Which statement best describes the purpose of a conceptual framework for financial reporting?

A company sells equipment but retains substantially all risks and rewards and must repurchase it at a fixed price. What should accounting analysis focus on first?

The depreciation charge depends on management’s forecast of how long an asset will be used. Which underlying input is an estimate?

Office furniture costing ₹48,000 is purchased for cash. Which entry records the transaction correctly?

A business withdraws ₹8,000 from its bank account and places it in the cash box. In a two-column cash book, this is normally recorded as:

A petty cashier has a fixed imprest of ₹4,000, vouchers of ₹2,760 and physical cash of ₹1,240. What reimbursement restores the imprest?

A cash book shows a debit bank balance of ₹75,000. Cheques issued for ₹9,000 have not yet been presented. With no other differences, the passbook balance is:

A cheque of ₹12,500 deposited was dishonoured, but the cash book has not yet been updated. To reconcile from the cash-book balance to the passbook balance, the dishonoured cheque should be:

Which error may remain undetected even when the trial balance agrees?

A trial balance has credit totals ₹3,200 greater than debit totals. Pending identification of the errors, the suspense account is opened. Which side should it initially have?

A firm depreciates a ₹3,60,000 asset over six years and expects ₹30,000 at disposal. Using the straight-line method, what is the annual charge?

A machine has an opening carrying amount of ₹2,00,000 and is depreciated at 20% under the written-down-value method. Depreciation for the year is:

A machine with carrying amount ₹70,000 is sold for ₹64,000, with no selling costs. What is the result on disposal?

A business incurs substantial expenditure to extend a building’s capacity and useful life. If recognition criteria are met, the expenditure is generally:

When inventory’s net realisable value falls below its cost, the usual financial-reporting principle is to measure it at:

The person who draws a bill of exchange is the person who:

A bill for ₹2,40,000 is discounted 60 days before maturity at 9% per annum on a 360-day basis. What is the bank discount?

At year-end, wages of ₹28,000 have been earned by employees but remain unpaid. The adjusting entry is:

Annual insurance of ₹24,000 is paid on 1 January for 12 months. At 31 March, assuming a calendar financial year and straight-line allocation, the prepaid portion is:

A bank receives commission in advance for a service to be delivered next quarter. Until the service is performed, the receipt is generally treated as:

An inter-branch reconciliation item remains outstanding for several months. Which action is most appropriate?

Which procedure usually provides stronger external evidence of a receivable balance?

Segregation of duties in accounting primarily aims to:

Transfer pricing principally concerns the price charged for transactions between:

If a specific applicable accounting standard conflicts with a general conceptual-framework statement, an entity should normally:

A statement of financial position reports total resources of ₹9,80,000 and obligations to outsiders of ₹3,45,000. Calculate the residual interest of the owners.

Closing inventory is omitted from the trial-balance adjustments and is not included elsewhere. In the usual trading-account treatment, this omission will generally:

A trial balance shows salaries ₹4,80,000; additional salaries of ₹35,000 are outstanding at year-end. What expense should appear in the income statement?

Trade receivables are ₹5,00,000 and the required allowance is 4% of receivables. Assuming no existing allowance, what allowance is required?

An issuer receives ₹14 per share on 10,000 shares whose face value is ₹10. Assuming all shares are fully paid, how much of the proceeds represents share premium?

A shareholder fails to pay a valid call amount by the due date. The unpaid amount is commonly described as:

Which feature most commonly distinguishes preference shares from ordinary equity shares?

Cash paid to acquire a long-term machine is normally classified in a cash-flow statement as:

Cash received from issuing ordinary shares is normally a:

While converting profit before tax to operating cash flow under the indirect approach, why is the depreciation charge reversed?

In traditional financial analysis, which balance-sheet resource category is examined to explain the sources and applications of funds over a period?

In a bank’s balance sheet, customer deposits are generally shown as:

A bank accrues interest due from borrowers on performing advances. In which broad income category is this normally presented?

A reader needs to understand accounting policies, material balances and risk-related details behind a bank’s headline figures. Which part of the annual financial statements provides these explanations?

A parent controls another entity and is required to prepare consolidated financial statements. The consolidation generally presents:

In a core banking system, a customer’s account transaction at a branch other than the home branch is typically enabled by:

Which control most directly helps preserve an audit trail in a computerised accounting system?

A bank stores a backup on the same server as its live database. What is the principal weakness?

A recovery time objective (RTO) primarily specifies:

A recovery point objective (RPO) of 30 minutes means the organisation aims to limit data loss to approximately:

Which is an example of an IT general control?

An auditor obtains sufficient appropriate evidence and concludes that financial statements are free from material misstatement. The auditor may issue:

A suspense ledger in a bank should be used primarily to:

A bank changes a material accounting policy where permitted. Which disclosure is most useful to users?

Regulatory capital disclosures in a bank’s annual report primarily help users assess:

For a company whose shares are publicly traded, the conventional financial-management objective is most often framed as:

An agency problem can arise when:

A company can realise ₹7.2 lakh of current assets and owes ₹4.8 lakh within the current period. What is its short-term liquidity ratio?

Current assets are ₹9,00,000, inventory ₹2,50,000 and prepaid expenses ₹50,000. Current liabilities are ₹5,00,000. The quick ratio is:

A borrower has ₹12 lakh of interest-bearing borrowings supported by ₹20 lakh of owners’ funds. Determine debt as a proportion of equity.

During the year, goods costing ₹18 lakh were issued/sold; average stock held was ₹3 lakh. How many times did inventory turn over?

Credit sales are ₹36 lakh and average trade receivables are ₹6 lakh. Using 360 days, the average collection period is:

Profit after tax is ₹4.5 lakh and average shareholders’ equity is ₹30 lakh. Return on equity is:

A deposit of ₹80,000 earns non-compounding interest at 7.5% each year. What interest accumulates over 24 months?

An investor leaves ₹50,000 untouched for two annual compounding periods at 8%. What amount will be available at maturity?

A lender quotes a nominal rate of 12% per annum, applying interest in 12 equal monthly compounding periods. What annual rate reflects compounding?

A payment of ₹1.21 lakh will be received two years from now. At a 10% annual compound discount rate, what is its value today?

Three year-end deposits of ₹10,000 earn 10% annually. Calculate the accumulated balance just after the third deposit is made.

In a fully amortising loan with a fixed periodic instalment and a positive interest rate, the interest component of each instalment generally:

An investor pays ₹950 for a ₹1,000 face-value bond that pays ₹80 coupon income each year. What is the coupon income divided by market price?

An outstanding fixed-coupon security becomes less attractive after comparable new securities begin offering higher yields. What normally happens to its market price?

For a conventional option-free fixed-rate bond, modified duration is commonly used as an approximation of:

A currency is quoted at ₹83.20 per unit spot and the one-year forward rate is ₹84.45. The foreign currency is at:

If USD/INR = 84 and EUR/USD = 1.10, what is EUR/INR, ignoring spreads?

After discounting all forecast receipts, a project’s inflows are worth ₹2.35 lakh today against an initial outlay of ₹2 lakh. What is the net present value?

Which rate of return makes the discounted value of a project’s expected net cash flows equal to its initial investment?

A capital outlay of ₹3 lakh is recovered through uniform cash receipts of ₹75,000 at each year-end. How long until the initial outlay is recovered, ignoring discounting?

Equity represents 60% of a company’s financing and costs 14%; after-tax debt is 40% at 8%. Find the weighted average financing cost.

A manufacturer’s cost base is dominated by fixed factory expenses rather than variable costs. What does this imply about the sensitivity of operating profit to sales?

A company’s inventory days are 50, receivable days 40 and payable days 30. Its operating cash-conversion cycle is:

For a tax year beginning on or after 1 April 2026, which legislation is the principal new income-tax statute, subject to its commencement and transition provisions?

For the new income-tax framework commencing in April 2026, what is the statutory name for the relevant 12-month period beginning 1 April?

A business deducts tax from a contractor’s payment. In the payer’s books, the amount deducted but not yet remitted is generally recorded as:

Deferred tax generally arises because of:

Subject to statutory conditions, input tax credit under GST is intended to reduce:

Within a normal production band, rent for the factory remains ₹2 lakh in total whether output rises or falls. How is this cost classified?

If direct material costs are ₹120 per unit, total direct material cost for 750 units is:

A cost sheet shows direct material ₹1.80 lakh, direct wages ₹95,000 and direct expenses ₹15,000. Compute the prime-cost subtotal.

For a production period, prime cost is ₹2.90 lakh, factory overhead ₹60,000, opening unfinished work ₹12,000 and closing unfinished work ₹17,000. Find factory/works cost.

When valuing manufactured inventory using full absorption costing, how is fixed production overhead treated?

Under marginal costing, fixed manufacturing overhead is normally treated as:

Fixed costs are ₹1,80,000, selling price per unit ₹150 and variable cost per unit ₹90. Break-even volume is:

Sales are ₹8,00,000 and variable costs are ₹5,20,000. Contribution is:

Contribution is ₹3,00,000 on sales of ₹7,50,000. The P/V ratio is:

A business sells goods worth ₹10 lakh while its break-even revenue is ₹7.5 lakh. Express the excess of actual sales over break-even sales as a percentage of actual sales.

A purchase department buys 2,000 kg at ₹54 per kg against a standard of ₹50 per kg. Calculate the material price variance and classify it.

Actual quantity used is 1,100 kg, standard quantity allowed 1,000 kg and standard price ₹20/kg. Material usage variance is:

Workers complete 400 hours at ₹160 per hour, while the standard wage is ₹150 per hour. Determine the labour rate variance.

Management wants a budget that can be restated for the actual volume of activity before comparing costs. Which budget approach meets this need?

Under which budgeting method must each activity be justified afresh instead of automatically inheriting last year’s allocation?

Process costing is most suitable when output consists of:

A process has partly completed work-in-progress at period-end. Which calculation allows those incomplete units to share costs fairly with completed output?

In contract costing, retention money is generally the amount:

For a hospital ward, a suitable service cost unit may be:

The main purpose of comparing actual performance with budget is to: