JAIIB Exam Study Material: JAIIB AND DB&F Paper 2 Syllabus: Accounting & Financial Management for Bankers
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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’s Exam Pattern, Eligibility, Schedule, Registration fees and Syllabus of Paper 1 in detail.
Now, in this article, we will be discussing about the JAIIB and DB&F Subjects and Syllabus of PAPER 2 in details.
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SUBJECTS OF DB&F AND JAIIB EXAMINATION:
(1) Principles & Practices of Banking, (i.e Paper 1)
(2) Accounting & Finance for Bankers, (i.e Paper 2)
(3) Legal & Regulatory Aspects of Banking (i.e Paper 3)
PAPER 2 – ACCOUNTING & FINANCE FOR BANKERS
This Paper 2 is divided into 4 Parts known as Modules (i.e Module A, B, C and D)
PART A – BUSINESS MATHEMATICS AND FINANCE
Calculation of Interest and Annuities
This unit of first module shows the Calculation of Simple Interest & Compound Interest, Calculation of Equated Monthly Instalments popularly known as EMIs; the concept of Fixed and Floating Interest Rates; Calculation of Annuities; Interest Calculation using Products or Balances; Amortisation of a Debt and Sinking Funds
Calculation of YTM
This unit talk about the Debt, the Definition of debt, its Meaning & Salient Features; What are Loans; Introduction to Bonds; Terms associated with Bonds; what is Cost of Debt Capital; What is Bond value with semi-annual Interest; how is Current Yield on Bond calculated; Calculation of Yield-to-Maturity of Bond (YTM); Theorems for Bond Value; Duration of Bond; Properties of Duration; Volatility of Bond Price etc.
Capital Budgeting
In this unit, the concept of Present Value and Discounting is discussed including various Discounting Techniques for Investment Appraisal such as Internal Rate of Return (IRR); Method of Investment Appraisal; NPV and IRR is compared; Investment Opportunities with the help of Capital Rationing; Investment Decision making under the condition or situation of uncertainty; Rule of Expected Net Present Value; Risk Adjusted Discount Rate Approach for NPV Determination; Sensitivity Analysis for NPV Determination; Decision Tree Analysis for NPV Estimation; Payback Methods; ARR i.e Average Rate of Return.
Depreciation and its Accounting
The unit contains the concept of Depreciation, types and methods of calculating depreciation; Comparing different Depreciation Methods
Foreign Exchange Arithmetic
The candidates will get to understand the Fundamentals of Foreign Exchange; what are the Forex Markets; Direct and Indirect Quotes; Some Basic Exchange Rate Arithmetic such as Cross Rate, Chain Rule and Value date, etc.; Forward Exchange Rates such as Forward Points; Arbitrage; Calculation of Forward Points; Premium and discount; etc through this unit.
PART B – PRINCIPLES OF BOOKKEEPING & ACCOUNTANCY
Definition, Scope and Accounting Standards
This unit contains the Nature and Purpose of Accounting; Historical Perspectives of accounting; what are the Origins of Accounting Principles; Accounting Standards prevalent in India and their Definition and Scope; What are Generally Accepted Accounting Principles of USA (US GAAP); the concept of Transfer Pricing; Overview of IFRS i.e International Financial Reporting Standards; Difference between IFRS & GAAP.
Basic Accountancy Procedures
The Concepts of Accountancy such as Going Concern Entity; What is Double Entry System; Principle of Conservatism, Revenue Recognition and Realisation; Accrual and Cash Basis of accounting etc are discussed in this unit.
Maintenance of Cash or Subsidiary Books and Ledger
The unit talks about the basics of Record Keeping; Categories of Account; Debit & Credit Concept; Accounting and Columnar Accounting Mechanics; Journal enteries; Ledger posting and other subsidiary books; etc.
Bank Reconciliation Statement
The unit puts light on the Need for Bank Reconciliation; the Causes of Differences in the balances; how is Bank Reconciliation Statement is prepared; How to prepare a Bank Reconciliation Statement (BRS) when the Extracts of Cash Book and Pass Book are given; Adjusting the Cash Book Balance and Advantages of preparing Bank Reconciliation Statement.
Trial Balance, Rectification of Errors and Adjusting & Closing Entries
You will read about the Meaning of a Trial Balance; Features and Purpose of a Trial Balance; Trial Balance types and Preparation of a Trial Balance; Disagreement of a Trial Balance; Classification of Errors; how to Locate Errors; Rectification of Errors; Suspense Account and its Rectification; Rectification of Errors when Books are closed; Adjusting as well as Closing Entries.
Capital and Revenue Expenditure
This unit provides the meaning for Expenditure; Distinction between Capital Expenditure and Revenue Expenditure; Meaning of Deferred Revenue Expenditure; Receipts; General Illustrations related to Capital & Revenue Expenditure.
Bills of Exchange
Different Types of Credit Instruments; Term and Due Date of a Bill of Exchange; Certain other Important Terms; Accounting Entries to be Passed in relation to Bills of Exchange; the meaning of Accommodation Bill etc.
PART C– FINAL ACCOUNTS
Balance Sheet Equation
This unit provides the Balance Sheet Equation; how the Computation of Balance Sheet Equation is done.
Preparation of Final Accounts
This unit talks about the Preparation of Final Accounts that includes Trading Account; Profit and Loss Account; Profit & Loss Appropriation Account and Balance Sheets
Ratio Analysis
This unit talks about the Meaning of Accounting Ratios; Classification of Ratios; Different Uses of Accounting Ratios; Limitations of using Accounting Ratios; Calculation and interpretation of various Ratios; Different Users and their Use of Ratios etc
Final Accounts of Banking Companies
The unit talks about the Definition and Functions of a Bank; Requirements of Banking Companies such as to Accounts & Audit; Significant Features of Banks’ Accounting Systems; Principal Books of Accounts; Preparation and Presentation of Financial Statements of Banks; Format of Credit Monitoring Arrangement (CMA); Accounting Treatment of Specific Items; Preparation of Profit & Loss Account; Comments on Profit and Loss Account; Important Items of Balance Sheet; Disclosure Requirements for Banks; Additional Disclosures prescribed by Reserve Bank of India; Disclosures required under BASEL norms & its pillars.
Company Accounts I & II
This unit on Company Accounts contains Definitions and Types of Companies; Distinction b/w Partnership and LLP i.e Limited Liability Company; Classes of Share Capital; Issue of Share Capital; General Illustrations related to share capital & transactions related to them, meaning of Non-voting Shares; Format of Balance Sheet & its forms; Legal Requirements for Assets; Legal Requirements for Liabilities; Legal Requirements for Profit & Loss A/c; Preparation of Final Accounts etc.
Accounting in a Computerized Environment
The unit contains the Meaning, Features and Terms used in Computerized Accounting; Difference b/w Computerized and Manual Accounting; Advantages & Disadvantages of Computerized Accounting; Functions performed by Computerized Accounting Softwares available in the Market; Scope and Experiences of Computerization in Banking; The Components of Core Banking; Security of Information; Internet and www i.e World Wide Web, World Wide Web’s Influences on Banking
PART D – BANKING OPERATIONS
Banking Operations & Accounting Functions
The unit contains information on how to Prepare Vouchers, cash receipt and entries of payment, entries of clearing inward and outward, transfer debit and credit entries, meaning of Know Your Customer and what are the different documents that are required to satisfy KYC, verification of KYC and checking the authenticity of documents, operational aspects in regard to opening of all types of accounts, scrutiny of loan applications and documents, allowing drawals and accounting entries that are involved at various stages, operational aspects of CBS environment etc., Back office operations in the banks, how to handle unreconciled entries in banks.
This Paper 2 of JAIIB & DB&F will be little bit logical and tough as compared to the other two papers i.e Paper 1 (PPB) and Paper 3 (LRAB). So, to tackle this situation, we will be practicing more of this practical subject than others and will go through their notes properly and have to attend the Quizzes.
On the very next upcoming Articles, we will be discussing about the Syllabus of Paper 3 which is LRAB - Legal & Regulatory Aspects of Banking in detail, about the subjects and how you can plan for it, study for it, and finally how you can start the preparation for this exam.
We want our readers to be on the top of their profession specially the Banking aspirants and bankers who think that success is not a destination where you reach once and then are done but it’s a continuous growth without any stop. And believe us when we say that you just can’t miss these courses. It is not mandatory but yes, it is very important for your knowledge and growth in any banking or financial institution.
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