JAIIB Exam Study Material: JAIIB AND DB&F Paper 2 Syllabus: Accounting & Finance for Bankers
So, in the previous articles, we read and discussed about JAIIB/DB&F, exam pattern, Eligibility, Schedule, Registration fees and Syllabus of Paper 1 in detail.
Now, in this article, we will be discussing about the JAIIB/DB&F Subjects and Syllabus of PAPER 2 subject in details.
SUBJECTS OF EXAMINATION:
(1) Principles & Practices of Banking, (Paper 1)
(2) Accounting & Finance for Bankers, (Paper 2)
(3) Legal & Regulatory Aspects of Banking (Paper 3)
PAPER 2 – ACCOUNTING & FINANCE FOR BANKERS This Paper 2 Subject is divided into four Parts (A,B,C and D)
PART A – BUSINESS MATHEMATICS AND FINANCE
Calculation of Interest and Annuities
Calculation of Simple Interest & Compound Interest; Calculation of Equated Monthly Instalments; Fixed and Floating Interest Rates; Calculation of Annuities; Interest Calculation using Products / Balances; Amortisation of a Debt; Sinking Funds
Calculation of YTM
Debt- Definition, Meaning & Salient Features; Loans; Introduction to Bonds; Terms associated with Bonds; Cost of Debt Capital; Bond value with semi-annual Interest; Current Yield on Bond; Calculation of Yield-to- Maturity of Bond; Theorems for Bond Value; Duration of Bond; Properties of Duration; Bond Price Volatility
Present Value and Discounting; Discounted Technique for Investment Appraisal; Internal Rate of Return (IRR); Method of Investment Appraisal; NPV and IRR compared; Investment Opportunities with Capital Rationing; Investment Decision making under condition of uncertainty; Expected NPV Rule; Risk Adjusted Discount Rate Approach for NPV Determination; Sensitivity Analysis for NPV Determination; Decision Tree Analysis for NPV Estimation; Payback Methods; ARR.
Depreciation and its Accounting
Depreciation, its types and methods; Comparing Depreciation Methods
Foreign Exchange Arithmetic
Fundamentals of Foreign Exchange; Forex Markets; Direct and Indirect Quote; Some Basic Exchange Rate Arithmetic – Cross Rate, Chain Rule, Value date, etc.; Forward Exchange Rates – Forward Points; Arbitrage; Calculating Forward Points; Premium / discount; etc.
PART B – PRINCIPLES OF BOOKKEEPING & ACCOUNTANCY
Definition, Scope and Accounting Standards
Nature and Purpose of Accounting; Historical Perspectives; Origins of Accounting Principles; Accounting Standards in India and its Definition and Scope; Generally Accepted Accounting Principles of USA (US GAAP); Transfer Pricing; Overview of IFRS; Difference between GAAP & IFRS.
Basic Accountancy Procedures
Concepts of Accountancy; Going Concern Entity; Double Entry System; Principle of Conservatism; Revenue Recognition and Realisation; Accrual and Cash Basis.
Maintenance of Cash / Subsidiary Books and Ledger
Record Keeping Basics; Account Categories; Debit and Credit Concepts; Accounting and Columnar Accounting Mechanics; Journals; Ledgers; subsidiary books; etc.
Bank Reconciliation Statement
Need for Bank Reconciliation; Causes of Differences; Preparation of Bank Reconciliation Statement; How to prepare a Bank Reconciliation Statement when Extracts of Cash Book and Pass Book are given; Adjusting the Cash Book Balance; Advantages of Bank Reconciliation Statement.
Trial Balance, Rectification of Errors and Adjusting & Closing Entries
Meaning of a Trial Balance; Features and Purpose of a Trial Balance; Types of Trial Balance and Preparation of a Trial Balance; Disagreement of a Trial Balance; Classification of Errors; Location of Errors; Rectification of Errors; Suspense Account and Rectification; Rectification of Errors when Books are closed; Adjusting and Closing Entries.
Capital and Revenue Expenditure
Expenditure; Distinction between Capital and Revenue Expenditure; Deferred Revenue Expenditure; Receipts; General Illustrations.
Bills of Exchange
Types of Instruments of Credit; Term and Due Date of a Bill; Certain Important Terms; Accounting Entries to be Passed; Accommodation Bill etc.
PART C– FINAL ACCOUNTS
Balance Sheet Equation
Balance Sheet Equation; Computation of Balance Sheet Equation.
Preparation of Final Accounts
Preparation of Trading A/C; Profit and Loss A/C; Profit & Loss Appropriation Account; Balance Sheets
Meaning of Accounting Ratios; Classification of Ratios; Uses of Accounting Ratios; Limitations of Accounting Ratios; Calculation and interpretation of various Ratios; Different Users and their Use of Ratios.
Final Accounts of Banking Companies
Definition and Functions of a Bank; Requirements of Banking Companies as to Accounts and Audit; Significant Features of Accounting Systems of Banks; Principal Books of Accounts; Preparation and Presentation of Financial Statements of Banks; CMA Format; Accounting Treatment of Specific Items; Preparation of Profit and Loss Account; Comments on Profit and Loss Account; Important Items of Balance Sheet; Disclosure Requirements of Banks; Additional Disclosures prescribed by RBI; Disclosures required under BASEL norms.
Company Accounts I & II
Definition and Types of Companies; Distinction between Partnership and Limited Liability Company; Classes of Share Capital; Issue of Shares; General Illustrations Non-voting Shares; Form of Balance Sheet; Legal Requirements for Assets; Legal Requirements for Liabilities; Legal Requirements for Profit & Loss A/c; Preparation of Final Accounts
Accounting in a Computerized Environment
Meaning, Features of and Terms used in Computerized Accounting; Difference between Computerized and Manual Accounting; Advantages and Disadvantages of Computerized Accounting; Functions performed by Computerized Accounting Softwares available in the Market; Computerization – Scope and Experiences in Banking; The Core Banking Components; Information Security; Internet and World Wide Web – Influences on Banking
PART D – BANKING OPERATIONS
Banking Operations & Accounting Functions
Preparation of Vouchers, cash receipt and payment entries, clearing inward and outward entries, transfer debit and credit entries, what is KYC and what are the different documents to satisfy KYC, verify KYC and authenticity of documents, operational aspects in regard to opening of all types of accounts, scrutiny of loan applications / documents, allowing drawals and accounting entries involved at various stages, operational aspects of CBS environment etc., Back office operations in banks, handling of unreconciled entries in banks.
This Paper 2 will be little bit logical and tough as compared to other two papers Paper 1 and Paper 3. So for this we will be practicing more and will go through the notes properly, have to attend the Quizzes.
On the very next upcoming Articles, we will be discussing about the Syllabus of Paper 3 Legal & Regulatory Aspects of Banking in detail, about the subjects and how to plan for it, study for it, and finally we together will start the preparation for these.
We want our readers to be on the top of every profession specially our Banking aspirants and bankers who think that there is no way to stop where you are and there is never a stop to your growth. And believe us You can’t miss these courses. It is not mandatory but yes it is very very important for your knowledge and growth in any banking or financial institution.