ABA Study Guide 2026

Accrual accounting recognizes revenues when they are earned and expenses when they are incurred, regardless of when cash is exchanged. In contrast, cash accounting only records transactions when cash is actually received or paid, which can misrepresent a company's financial performance over a period.

In Tax Preparation & Compliance, a thorough initial assessment ensures all relevant factors are identified before deciding on an appropriate course of action. This systematic approach is fundamental to Accredited Business Accountant practice.

Safety and ethics always take priority in Managerial & Cost Accounting. When standard procedures don't adequately address a unique situation, consulting with experienced colleagues or supervisors ensures both safety and professional standards are maintained.

Continuing education in Managerial & Cost Accounting ensures professionals maintain current knowledge and skills as standards, technologies, and best practices evolve in the Accredited Business Accountant field.

Earnings Per Share (EPS) is a crucial profitability metric that indicates the portion of a company's profit allocated to each outstanding share of common stock. It is calculated by dividing net income (minus preferred dividends) by the number of outstanding common shares. EPS is widely used by investors to gauge a company's financial performance and value per share.

Depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life. It systematically reduces the asset's book value on the balance sheet and recognizes a portion of its cost as an expense each period, reflecting the asset's wear and tear or obsolescence.