CCA Cheat Sheet 2026

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

1. Which capital budgeting method accounts for the time value of money AND expresses the return as a percentage? → Internal rate of return (IRR)
2. Which of the following is an example of an indirect manufacturing cost? → Factory supervisor salary
3. Which method of allocating service department costs allocates costs sequentially, with no re-allocation back to previously allocated departments? → Step-down method
4. Customer profitability analysis is primarily used to: → Identify which customers contribute most to overall company profitability
5. Which type of audit opinion is issued when financial statements present fairly in all material respects? → Unmodified (clean) opinion
6. Which assertion addresses whether transactions are recorded in the correct accounting period? → Cutoff
7. Which of the following would be a red flag in regulatory compliance? → Late or missing tax filings
8. Which costing method assigns manufacturing overhead to products based on the activities that drive costs? → Activity-based costing (ABC)
9. In a standard costing system, the labor efficiency variance is calculated as: → (Actual hours – Standard hours) × Standard rate
10. Which financial ratio is used to evaluate liquidity? → Current ratio
11. Which strategic cost analysis tool examines the full series of value-creating activities from raw materials through final delivery to the customer? → Value chain analysis
12. What does a favorable materials price variance indicate? → Material was purchased at less than standard price
13. Target costing is most accurately calculated as: → Market price minus desired profit margin
14. The contribution margin ratio is calculated as: → Contribution Margin ÷ Sales
15. The arm's-length principle in transfer pricing strategy requires that: → Transactions between related parties be priced as if conducted between independent parties
16. Which is an example of a preventive control? → Approval requirements for purchases
17. What type of short-term investment is most appropriate for a corporate treasurer seeking maximum liquidity and minimal credit risk? → US Treasury bills (T-bills)
18. According to the Modigliani-Miller theorem (with taxes), what happens to firm value as debt increases? → Firm value increases due to the tax shield on interest
19. What is compliance risk in corporate finance? → Violation of legal or regulatory requirements
20. Which of the following best describes the pecking order theory of capital structure? → Firms prefer internal financing first, then debt, and issue equity only as a last resort
21. What does a high operating leverage ratio indicate about a company's cost structure? → A large proportion of fixed costs relative to variable costs
22. A 'strategic gap' in management accounting refers to: → The difference between current organizational performance and defined strategic objectives
23. What is the primary purpose of a flexible budget in cost management? → To adjust budgeted costs based on actual activity levels for meaningful variance analysis
24. What does the balance sheet represent? → Financial position at a point in time
25. What is the main purpose of internal controls in a corporation? → To ensure accurate and compliant operations
26. Under the efficient market hypothesis (EMH) in its semi-strong form, which information is fully reflected in stock prices? → All publicly available information
27. Which regulatory body oversees corporate financial disclosures in the U.S.? → SEC
28. Lean accounting supports lean manufacturing environments by: → Eliminating non-value-added accounting activities and using value-stream costing
29. What is the purpose of internal controls in tax compliance? → Ensure accurate and lawful tax practices
30. What is financial leverage, and what is its primary effect on earnings? → Using debt financing to amplify returns; it magnifies both gains and losses