CPA Cheat Sheet 2026

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

1. Which business valuation method estimates value based on expected future cash flows discounted to present value? → Discounted cash flow (DCF) method
2. Which GASB concept requires governments to report on their fiscal accountability by using the modified accrual basis in fund statements? → Fiscal accountability
3. What does the balance sheet show? → Assets, liabilities, and equity.
4. What is budget variance analysis in CPA financial management? → Comparing actual spending against budgeted amounts to explain differences
5. Under GASB standards, infrastructure assets such as roads and bridges may be reported using the: → Either the depreciation method or the modified approach
6. What is a strategic plan? → A long-term plan that guides an organization toward its vision and mission.
7. What is a near-miss report in CPA practice? → Documentation of an event that could have caused harm but did not
8. What are consequences of non-compliance in CPA practice? → Fines, license revocation, legal liability, and reputation damage
9. What is a budget variance? → The difference between budgeted costs and actual costs.
10. Under GASB standards, what is the primary measurement focus for governmental fund financial statements? → Current financial resources
11. What is depreciation? → The allocation of an asset's cost over time.
12. What is the primary goal of regulatory compliance in CPA practice? → Ensuring adherence to laws and standards governing professional practice
13. What role does feedback play in CPA professional development? → Identifying strengths and improvement areas to guide growth
14. What is the role of a financial analyst in strategic management? → To analyze financial data and provide insights for business decisions.
15. A CPA discovers during an audit that a client has committed an immaterial illegal act. What is the CPA's primary obligation? → Inform the client's management or those charged with governance
16. In IT systems, which process ensures data remains accurate, consistent, and unaltered during storage and transmission? → Data integrity
17. The master budget is BEST described as: → A comprehensive set of budgets culminating in pro forma financial statements
18. What is active listening in CPA practice? → Fully concentrating on the speaker and providing thoughtful feedback
19. What is a capital gain? → The increase in an asset’s market price, taxed upon sale.
20. When using net present value (NPV) for capital budgeting, a project should be accepted if: → NPV is greater than zero
21. Which organizational structure groups employees by function, such as marketing, finance, and operations? → Functional structure
22. What is trend analysis in CPA reporting? → Examining data over time to identify patterns and changes
23. Under FASB ASC 958 for not-for-profits, which of the following is required to be presented in the statement of cash flows? → Operating, Investing, and Financing activities
24. What is budget variance analysis in CPA financial management? → Comparing actual spending against budgeted amounts to explain differences
25. Which statement best describes a CPA's responsibility when a client asks them to act as an expert witness? → The CPA must provide objective testimony based on professional expertise
26. A CPA who prepares a tax return using information provided by the client without independent verification is applying the concept of: → Reasonable reliance on client representations
27. Which of the following costs would be included in a product's cost under absorption costing but NOT under variable costing? → Fixed manufacturing overhead
28. What is the purpose of management accounting? → To assist managers in making informed business decisions.
29. Which GASB statement established the requirement for government-wide financial statements in addition to fund financial statements? → GASB Statement No. 34
30. A government levies a special assessment on property owners to finance sidewalk improvements. Which fund should account for the construction activity? → Capital Projects Fund