CBS Cheat Sheet 2026

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

1. Days inventory outstanding (DIO) is calculated as: → (Average inventory ÷ Cost of goods sold) × 365
2. A budget specialist reviewing a 13-week cash flow forecast is primarily focused on: → Short-term liquidity management
3. What is the primary purpose of a leveraged buyout (LBO)? → To acquire a company using mostly borrowed funds
4. In portfolio theory, diversification primarily reduces which type of risk? → Unsystematic risk
5. If a company budgets fixed overhead at $120,000 for 10,000 units but actually produces 8,000 units, what is the fixed overhead volume variance? → $24,000 unfavorable
6. Which AIS control ensures that the total of individual accounts receivable balances equals the accounts receivable control account in the general ledger? → Subsidiary ledger reconciliation
7. What is the purpose of a pro forma financial statement in the budgeting process? → To project future financial position based on planned activities
8. Why is budgeting crucial for financial stability? → To control expenses and allocate resources efficiently
9. In public sector budgeting, which term describes the legal prohibition on spending funds that have not been formally appropriated? → Anti-deficiency principle
10. Which technique spreads supplier payments to later in the payment terms window to preserve cash? → Payment stretching
11. Which federal statute requires agencies to report Antideficiency Act violations to both Congress and the President? → The Anti-Deficiency Act itself
12. Net float is the difference between: → Disbursement float and collection float
13. A government budget is considered 'balanced' when: → Total revenues equal or exceed total expenditures for the fiscal year
14. Which skill is most important for success in Corporate Finance & Investment within Certified Bankruptcy Specialist? → Continuous learning and adaptation
15. Which capital budgeting method accounts for the time value of money and gives a dollar-value result? → Net Present Value
16. In post-audit analysis of capital projects, the primary purpose is to: → Compare actual project outcomes to initial projections to improve future decision-making
17. Which approach best supports quality outcomes in Corporate Finance & Investment for Certified Bankruptcy Specialist? → Systematic application of evidence-based methods
18. A project requires an initial investment of $200,000 and generates $50,000 annual cash flows for 5 years. What is the payback period? → 4 years
19. Which expense reporting practice helps organizations identify and eliminate 'expense creep' over time? → Rolling 12-month trend analysis of expense categories
20. When auditing a federal budget, which document establishes the legal authority for an agency to incur obligations? → An apportionment approved by OMB
21. The term 'cost avoidance' differs from 'cost reduction' in that cost avoidance: → Prevents a future cost from being incurred rather than eliminating an existing one
22. Which budgeting approach allocates resources based on the expected volume and cost of specific activities rather than by department or cost center? → Activity-based budgeting (ABB)
23. Which type of audit opinion is issued when financial statements contain a material misstatement that is pervasive to the statements as a whole? → Adverse opinion
24. Beta of 1.2 for a stock means the stock is expected to: → Rise 1.2% for every 1% move in the market
25. Which document formally communicates a rescission — the cancellation of previously enacted budget authority — to Congress? → A special message submitted by the President under the Impoundment Control Act
26. A company's operating budget shows revenue of $500,000 and total expenses of $420,000. What is the operating income? → $80,000
27. Which budgeting method builds each budget period from zero, requiring all expenses to be justified regardless of prior-year spending? → Zero-based budgeting
28. When preparing consolidated financial statements under IFRS 10, how should intragroup transactions be treated? → Eliminated in full
29. A company budgeted $500,000 in sales but achieved $480,000. How is this variance classified? → Unfavorable, $20,000
30. Which payroll record retention period does the IRS require for employment tax records such as W-4s and payroll registers? → 4 years