FAC Cheat Sheet 2026

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

1. Which variance should a purchasing manager MOST likely be held accountable for? → Material price variance
2. A company projects ending cash of $50,000 but requires a minimum cash balance of $75,000. What should the financial plan indicate? → A need to borrow $25,000
3. What is the primary purpose of tax compliance? → To ensure adherence to tax laws and avoid penalties
4. Which of the following would increase operating cash flow without affecting net income? → Increase in depreciation expense
5. Which section of the cash flow statement would reflect the proceeds from selling a building? → Investing activities
6. Which of the following correctly describes the difference between an employee and an independent contractor for payroll purposes? → Employers withhold payroll taxes for employees but not for independent contractors
7. A taxpayer uses the home office deduction under the simplified method. The maximum deduction per square foot is: → $5
8. Which ethical framework holds that certain rules or duties must be followed regardless of the outcome, because the act itself is inherently right or wrong? → Deontological ethics
9. Which ratio indicates how many times a company sold and replaced its inventory during a period? → Inventory turnover
10. Which cost concept represents the benefit foregone by choosing one alternative over the next best alternative? → Opportunity cost
11. Which type of operational risk arises from the failure of internal processes, people, systems, or from external events, as defined by Basel II? → Operational risk
12. Which forecasting method uses historical data to identify patterns such as trend, seasonality, and cycles to project future values? → Time series analysis
13. The accounts payable turnover ratio measures: → How many times a company pays off its average accounts payable balance per period
14. Which AICPA standard requires auditors to communicate significant deficiencies to those charged with governance? → AU-C 265
15. What is the employer's matching OASDI (Social Security) tax rate as of 2024? → 6.2%
16. Kaizen costing differs from standard costing primarily because kaizen costing: → Focuses on continuous, incremental cost reduction during the production phase
17. Which ethical principle requires a CPA to be straightforward and honest in all professional and business relationships? → Integrity
18. A company collects $50,000 from customers but recorded $60,000 in sales. Which statement best explains the $10,000 difference? → Accounts receivable increased by $10,000
19. What is the break-even point in cost management? → The point where total revenue equals total costs
20. What is the term for costs that change in total in direct proportion to changes in the level of production activity? → Variable costs
21. Which of the following is an example of a financing activity on the cash flow statement? → Repayment of a long-term loan
22. What is absorption costing? → A method that includes all manufacturing costs — fixed and variable — in product cost
23. Which type of audit opinion is issued when financial statements contain a material misstatement that is not pervasive? → Qualified opinion
24. Which ratio best measures the proportion of a company's assets financed by creditors? → Debt ratio (total liabilities ÷ total assets)
25. Which ratio directly measures how efficiently a company converts its revenues into cash available to all capital providers? → EBITDA margin
26. Under the AICPA Code of Professional Conduct, which principle requires a CPA not to subordinate professional judgment to that of others? → Objectivity and independence
27. Which ratio measures a company's ability to cover capital expenditures using operating cash flow? → Capital expenditure coverage ratio
28. Continuous monitoring controls differ from periodic controls primarily because they: → Detect anomalies in real time or near real time
29. A company is preparing a cash budget and must decide when to include a credit sale in the cash receipts schedule. The correct approach is to: → Record cash receipt in the period the cash is expected to be collected
30. What is the purpose of a feasibility study in Finance and Accounting Certification project planning? → To determine if a project is viable and worth pursuing