CFC Cheat Sheet 2026

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

1. Which control involves separating duties to reduce fraud risk? → Segregation of duties
2. When a financial controller evaluates a lease-versus-buy decision, the appropriate discount rate for the lease cash flows is typically the: → After-tax cost of debt
3. What is the primary difference between comprehensive income and net income? → Comprehensive income includes other comprehensive income items bypassing net income
4. The PCAOB's auditing standards for internal controls require external auditors to evaluate which of the following when assessing a company's ICFR? → Both entity-level and transaction-level controls
5. Under the acquisition method, how is noncontrolling interest (NCI) measured at the acquisition date under US GAAP? → Either at fair value or at the NCI's proportionate share of net identifiable assets
6. Which financial metric is most useful for comparing the operating performance of two companies with different capital structures? → EBITDA margin
7. A company restates prior-period financial statements due to a material accounting error. How is the correction reported? → As a prior-period adjustment to the opening retained earnings balance
8. What is a 'bargain purchase' in the context of a business combination? → An acquisition where fair value of net identifiable assets exceeds the purchase price
9. Which technique breaks a forecast into trend, seasonal, cyclical, and irregular components? → Time-series decomposition
10. Which ERP implementation approach goes live with all modules simultaneously across the entire organization? → Big Bang implementation
11. Which transfer pricing method uses gross profit margins of comparable uncontrolled transactions to set intercompany prices? → Resale Price method
12. In the context of financial risk management, what does 'credit risk' specifically refer to? → The risk that a counterparty will fail to meet its financial obligations
13. Which of the following best describes a key competency required for merger & acquisition accounting in CFC practice? → Strong analytical skills combined with effective communication and ethical judgment
14. A multinational firm uses a 'leading and lagging' strategy in intercompany payments. When expecting a foreign currency to appreciate, the firm should: → Lead payments owed in that currency and lag receipts in that currency
15. What is the main purpose of a budget? → To allocate financial resources effectively
16. What is a dividend policy? → Profit distribution plan
17. What is zero-based budgeting? → Starting each period from zero, justifying all expenses
18. Which financial strategy is most consistent with maximizing long-term shareholder value? → Investing in all projects with positive NPV
19. Which risk management framework is most commonly referenced by US financial controllers for enterprise-wide risk oversight? → COSO ERM Framework
20. Which of the following is a limitation of using historical data as the primary basis for financial forecasting? → It assumes past trends and relationships will continue into the future
21. When a company issues a bond at a discount, the carrying value of the bond over its life will: → Increase to par value at maturity
22. A controller wants to use predictive analytics within the ERP to forecast cash flow. Which data source MOST directly supports this capability? → Historical accounts receivable aging, accounts payable due dates, and sales order pipeline
23. What is the purpose of financial ratio analysis? → To evaluate business performance
24. What does ROI stand for in financial strategy? → Return on Investment
25. A company reports a current ratio of 0.8. What does this indicate? → The company may struggle to meet short-term obligations
26. A company's accounts payable days (DPO) are 40, inventory days (DIO) are 60, and DSO is 50. What is the cash conversion cycle? → 70 days
27. Which of the following statements about weighted-average process costing is correct? → It merges beginning WIP costs with current period costs
28. In the context of CFC certification, what is the most important consideration when implementing cost accounting & management? → Ensuring alignment with established standards, stakeholder needs, and best practices
29. Which financial technology concept involves using algorithms to automatically match incoming bank transactions to open accounting entries? → Bank Reconciliation Automation / Cash Application
30. When auditors perform a walkthrough of a business process, what are they PRIMARILY evaluating? → Whether employees are following the documented process and controls as described