ABA Cheat Sheet 2026

The 30 highest-yield ABA facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What is the 'fraud triangle'? → Three conditions (pressure, opportunity, rationalization) that typically lead to fraud
2. Which standard of practice is MOST important for ensuring quality in Tax Preparation & Compliance? → Following evidence-based protocols while adapting to specific circumstances
3. What is included in shareholders' equity on the balance sheet? → Common stock, retained earnings, and additional paid-in capital.
4. Which of the following is considered an intangible asset? → Patent
5. What is a promissory note in credit management? → A written promise to pay a specific amount at a specific time
6. Under the direct write-off method, bad debt expense is recorded when: → A specific account is determined to be uncollectible
7. What happens to a business's cash flow when Days Sales Outstanding (DSO) increases? → Cash flow decreases because collections are slower
8. A vendor issues a credit memo to a buyer. What effect does this have on the buyer's accounts payable balance? → Decreases it
9. A purchase return in the accounts payable system is best documented by: → A debit memo issued by the buyer
10. What is the debt-to-equity ratio used to assess? → The company’s financial leverage.
11. In Payroll Processing & Compliance, what is the FIRST step a ABA professional should take when encountering a new case or situation? → Conduct a comprehensive assessment and gather all relevant information
12. What is the primary purpose of financial accounting? → To provide financial information to external users.
13. What does the statement of cash flows primarily focus on? → The sources and uses of the company’s cash.
14. When a conflict arises between standard procedures and a unique situation in Bookkeeping & General Ledger, what should a ABA professional prioritize? → Safety and ethical obligations while seeking expert consultation
15. What is a credit limit? → The maximum amount of credit extended to a customer
16. What is the purpose of a whistleblower policy in internal controls? → To provide a safe channel for reporting suspected fraud or misconduct
17. What is an audit in taxation? → A review of tax filings to ensure accuracy.
18. What is 'control risk' in the context of internal auditing? → The risk that internal controls will fail to prevent or detect a material misstatement
19. Which standard of practice is MOST important for ensuring quality in Bookkeeping & General Ledger? → Following evidence-based protocols while adapting to specific circumstances
20. Which collection letter sequence is typically followed when a customer becomes delinquent? → Reminder, demand letter, final notice, legal action
21. Which of the Five Cs of Credit refers to a borrower's ability to repay a loan from income? → Capacity
22. What is the PRIMARY purpose of continuing education requirements in Payroll Processing & Compliance for ABA professionals? → Maintaining current knowledge and competency as the field evolves
23. When a conflict arises between standard procedures and a unique situation in Managerial & Cost Accounting, what should a ABA professional prioritize? → Safety and ethical obligations while seeking expert consultation
24. When a conflict arises between standard procedures and a unique situation in Audit & Attestation Services, what should a ABA professional prioritize? → Safety and ethical obligations while seeking expert consultation
25. What is a 'red flag' in fraud detection? → An unusual indicator that may suggest fraudulent activity
26. Which standard of practice is MOST important for ensuring quality in Business Advisory & Consulting? → Following evidence-based protocols while adapting to specific circumstances
27. In Bookkeeping & General Ledger, what is the FIRST step a ABA professional should take when encountering a new case or situation? → Conduct a comprehensive assessment and gather all relevant information
28. Which report helps management identify customers who consistently pay late? → Accounts receivable aging report
29. In Business Advisory & Consulting, what is the FIRST step a ABA professional should take when encountering a new case or situation? → Conduct a comprehensive assessment and gather all relevant information
30. What is the break-even point in cost accounting? → When total costs equal total revenues.