AFC Cheat Sheet 2026

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

1. Which of the following would increase the risk of inventory obsolescence? → Short product life cycles
2. Which of the following best describes 'net realizable value' of inventory? → Expected selling price minus estimated costs to complete and sell
3. What is the aim of accounting standards? → All of these
4. What does "accrual accounting" mean in Accounting Fundamentals Certification? → Recording revenues and expenses when they are earned or incurred, regardless of cash flow
5. Which of the following costs is NOT included in the cost of inventory under US GAAP? → Storage costs after purchase
6. What is the relationship between theory and practice in Accounting Fundamentals Certification accounts receivable? → Theory provides the foundation and framework that guides effective practical application
7. Which approach is most effective for mastering accounts receivable in Accounting Fundamentals Certification? → Combining theoretical study with practical application and regular review
8. What do financial statements reflect? → All of these
9. Under the FIFO (First-In, First-Out) inventory method, which units are assumed to be sold first? → The oldest purchased units
10. A consignor ships goods to a consignee. Who should include these goods in their inventory? → The consignor, because they retain ownership
11. A check for $540 was correctly recorded by the bank but entered in the company's books as $450. In the bank reconciliation, this error is: → Deducted $90 from the book balance
12. What does inventory turnover ratio measure? → How many times inventory is sold and replaced in a period
13. Which approach is most effective for mastering internal controls in Accounting Fundamentals Certification? → Combining theoretical study with practical application and regular review
14. Which inventory costing method typically results in the highest net income during a period of rising prices? → FIFO
15. In Accounting Fundamentals Certification, what does the term "net present value" (NPV) represent? → The difference between the present value of cash inflows and outflows over time
16. The accrual basis of accounting records revenues when they are: → Earned
17. What is a best practice in Accounting Fundamentals Certification budgeting? → A method or technique recognized as superior based on evidence and expert consensus
18. In Accounting Fundamentals Certification, what role does continuing education play in accounts receivable? → To keep professionals current with evolving standards, technologies, and best practices
19. An asset's depreciable cost is calculated as: → Original cost minus salvage value
20. Which depreciation method applies a constant rate to the declining book value of an asset each period? → Double-declining balance method
21. What is the primary objective of bookkeeping basics in Accounting Fundamentals Certification? → To ensure competence and proficiency in core bookkeeping basics concepts
22. What is the primary objective of financial statements in Accounting Fundamentals Certification? → To ensure competence and proficiency in core financial statements concepts
23. Which of these is not included as a separate item in the basic accounting equation? → Revenues
24. What is a best practice in Accounting Fundamentals Certification tax fundamentals? → A method or technique recognized as superior based on evidence and expert consensus
25. In Accounting Fundamentals Certification, what is the purpose of an internal audit? → To evaluate and improve risk management, control, and governance processes
26. What is the main purpose of financial accounting? → Provide useful, financial information to outsiders
27. What is the fundamental accounting equation? → Assets = Liabilities + Equity
28. When a depreciable asset is sold, the gain or loss on the sale is calculated as: → Selling price minus book value at the time of sale
29. What is a best practice in Accounting Fundamentals Certification accounts receivable? → A method or technique recognized as superior based on evidence and expert consensus
30. Under the lower-of-cost-or-net-realizable-value (LCNRV) rule, inventory is written down when: → Its net realizable value falls below its recorded cost