Certified Public Accountant Cheat Sheet 2026

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

1. Which financial statement analysis technique expresses each line item as a percentage of a base figure within the same period? → Vertical analysis
2. Under the UCC, a 'firm offer' made by a merchant is irrevocable for up to: → 90 days
3. How should an Certified Public Accountant professional present complex information to non-experts? → Translate into accessible language, use visuals, and check for understanding
4. What is the primary advantage of a Roth IRA compared to a traditional IRA? → Qualified distributions in retirement are tax-free
5. Which financial metric measures a company's ability to meet short-term obligations using its most liquid assets? → Quick ratio
6. Which type of audit risk arises from the possibility that a material misstatement will not be detected by the auditor's procedures? → Detection risk
7. An S corporation has $100,000 of ordinary income. Shareholder A owns 30% of shares. What amount flows through to Shareholder A? → $30,000
8. Under AICPA rules, a CPA who discovers a material error in a previously issued audit report must first: → Notify the client and advise them to disclose the error to affected parties
9. A management letter (letter of recommendations) issued after an audit is primarily intended to: → Communicate internal control and operational improvement suggestions to management
10. An auditor discovers that a client has recorded revenue from a bill-and-hold arrangement. What assertion is most directly at risk? → Occurrence
11. Under the US tax code, what is the maximum tax rate on qualified dividends received by individuals in the highest income bracket? → 20%
12. A CPA issues a report on prospective financial statements. If the statements are for general use, which type is appropriate? → Forecast
13. What is the holding period required for long-term capital gains treatment on the sale of a capital asset? → More than 12 months
14. How do Certified Public Accountant professionals transfer knowledge from training to practice? → Through supervised practice, mentoring, gradual independence, and ongoing feedback
15. Under IRC Section 61, which of the following is NOT included in gross income by default? → Gifts received from a family member
16. A CPA firm discovers that a quality control deficiency resulted in an audit report that may be inappropriate. The firm's MOST important immediate action is to: → Evaluate whether to withdraw the report or take other remedial action
17. An auditor who concludes that a material uncertainty about going concern exists but management's disclosures are adequate should: → Issue an unmodified opinion with an emphasis-of-matter paragraph
18. What role does peer review play in Certified Public Accountant practice? → It provides quality assurance and professional development through collegial evaluation
19. Which of the following would MOST likely be included in a CPA firm's annual quality control report issued to partners? → Summary of monitoring results, identified deficiencies, and corrective actions taken
20. Which financial statement is unique to government-wide reporting and not found in individual fund financial statements? → Statement of Net Position
21. Under the AICPA Code, a CPA firm that performs bookkeeping for an attest client creates a threat to independence classified as a: → Self-review threat
22. Deferred tax liabilities arise when: → Tax expense exceeds taxes currently payable
23. How does continuous improvement apply to Certified Public Accountant quality management? → It involves ongoing incremental enhancements to processes based on data and feedback
24. A company uses the allowance method for bad debts. When a previously written-off account is unexpectedly collected, the entry first requires: → Debit accounts receivable; credit allowance for doubtful accounts
25. Under the Foreign Corrupt Practices Act (FCPA), which of the following is NOT considered a foreign official for purposes of the anti-bribery provisions? → A private sector business competitor in a foreign country
26. A married couple files jointly and has $400,000 in net investment income. What is the Net Investment Income Tax (NIIT) rate? → 3.8%
27. Which of the following individuals is subject to self-employment tax? → A sole proprietor with net earnings from self-employment of $500
28. Under the Sarbanes-Oxley Act, which party must communicate internal control deficiencies to the audit committee of a public company? → The external auditor, who must report directly to the audit committee
29. Under GASB Statement No. 34, the Management's Discussion and Analysis (MD&A) section of a government's financial report is classified as: → Required supplementary information (RSI)
30. Which of the following is a leading indicator of liquidity risk for a company? → Declining current ratio over multiple quarters