AFM Practice Questions 2026

Accounting & Financial Management for Bankers

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About This Practice Test

Practice numerical and conceptual questions for AFM — covering accounting principles, financial statements, capital budgeting (NPV, IRR), ratio analysis, taxation, and costing. Includes calculation-based hard questions matching the real exam format.

Exam Pattern & Marking Scheme

DifficultyQuestionsMarks EachTotal Marks
Easy500.525
Medium25125
Hard (Numerical)25250
Total100100
⏱ Duration: 2 hours✅ Pass: 50 marks❌ No negative marking

Complete Syllabus Covered

Module A — Accounting Principles & Processes
Accounting concepts and conventionsDouble entry systemJournal and ledgerTrial balanceDepreciation methodsProvisions and reservesRectification of errorsBank reconciliation statement
Module B — Financial Statements & Core Banking
Trading and P&L accountBalance sheetCash flow statement AS-3Fund flow statementRatio analysisWorking capital managementNPBT calculationOperating activities
Module C — Financial Management
Time value of moneyCapital budgeting NPV IRRCost of capitalCapital structureLeverageDividend policyWorking capital financingRisk and returnCAPM
Module D — Taxation & Costing
Income tax basicsTDS provisionsGST overviewCost accounting conceptsMarginal costingBreak even analysisStandard costingBudgetary control

Sample Questions

Q1. A project requires an initial investment of ₹5,00,000 and generates cash flows of ₹1,50,000 per year for 5 years. At a discount rate of 10%, the NPV is approximately:

A. ₹68,618
B. ₹-68,618
C. ₹1,18,618
D. ₹-31,382

Explanation: NPV = -5,00,000 + 1,50,000 × PVIFA(10%, 5 years). PVIFA(10%, 5) = 3.7908. NPV = -5,00,000 + (1,50,000 × 3.7908) = -5,00,000 + 5,68,618 = ₹68,618. Since NPV > 0, the project is acceptable.

Q2. If Current Ratio is 2.5 and Quick Ratio is 1.5, and Current Liabilities are ₹2,00,000, what is the value of Inventory?

A. ₹1,00,000
B. ₹2,00,000
C. ₹3,00,000
D. ₹5,00,000

Explanation: Current Assets = 2.5 × 2,00,000 = ₹5,00,000. Quick Assets = 1.5 × 2,00,000 = ₹3,00,000. Inventory = Current Assets - Quick Assets = 5,00,000 - 3,00,000 = ₹2,00,000.

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What's Included

535+ questions including numerical problems
Step-by-step calculation explanations
NPV, IRR, BEP, and ratio problems
Hard questions are calculation-based (real exam format)
Depreciation, TDS, and GST computations
Updated for 2026 syllabus
Unlimited practice attempts
Formula reference in explanations

Frequently Asked Questions

Are the hard questions numerical/calculation-based?

Yes. Unlike other papers where hard questions are statement-based, AFM hard questions (2 marks each) require actual calculations — NPV, IRR, ratios, depreciation, break-even, etc.

Do explanations show step-by-step calculations?

Yes. Every numerical question includes a detailed step-by-step solution showing the formula used, intermediate calculations, and final answer.

Is a calculator allowed in the real exam?

Yes, IIBF provides an on-screen calculator during the exam. Our practice interface simulates the same environment.

How many questions are available?

Currently 535+ questions covering all 4 modules with a mix of conceptual and numerical problems.

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