IAB Cheat Sheet 2026

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

1. Which foundational principle is MOST important for success in the International Association of Bookkeepers Certification profession? → Commitment to continuous learning, ethical practice, and quality outcomes
2. Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay at what rate for hours worked over 40 in a workweek? → 1.5 times the regular rate
3. When conducting a risk assessment for IAB operations, which factor should receive the HIGHEST priority? → Probability and severity of potential harm
4. Under the perpetual inventory system, Cost of Goods Sold is recorded: → Each time a sale is made
5. Which payroll tax deposit schedule applies to employers with $50,000 or less in employment taxes in the lookback period? → Monthly depositor
6. The book value of a long-term asset is calculated as: → Original Cost − Accumulated Depreciation
7. What are the main financial statements used in accounting? → Balance sheet, income statement, and cash flow statement.
8. The federal unemployment tax (FUTA) rate is 6.0% on the first $7,000 of wages. The maximum credit against FUTA for timely state unemployment tax payments is: → 5.4%
9. Which regulatory requirement is UNIVERSAL across all International Association of Bookkeepers Certification practice settings? → Maintaining current certification and meeting continuing education requirements
10. What does the balance sheet show? → The company's assets, liabilities, and equity.
11. What is the significance of ethical behavior in business? → To create a fair and transparent environment that benefits stakeholders.
12. The IRS statute of limitations for assessing additional tax on a standard return is generally: → 3 years from filing or due date
13. Why is confidentiality important in business ethics? → To maintain trust and prevent misuse of sensitive information.
14. Which journal entry correctly records the employer's matching FICA taxes for Social Security and Medicare? → Debit: FICA Tax Expense; Credit: FICA Taxes Payable
15. What is the Medicare tax rate withheld from employee wages? → 1.45%
16. Which concept describes the illegal practice of classifying workers as independent contractors to avoid payroll tax obligations when they function as employees? → Worker misclassification
17. Which of the following is NOT subject to FICA (Federal Insurance Contributions Act) taxes? → Employer-paid health insurance premiums
18. Under US employment law, which of the following is a protected characteristic under Title VII of the Civil Rights Act? → National origin
19. A company is evaluating a special order at a price below its normal selling price. Which cost is MOST relevant to this decision? → Variable production cost per unit
20. Sales tax collected from customers should be recorded as: → A liability
21. Which of the following best describes 'negligence' in a business law context? → Failure to exercise reasonable care that results in harm
22. Which of the following is an example of a qualitative factor in a make-or-buy decision? → Supplier reliability and quality control
23. In segment reporting, a direct fixed cost is best described as: → A cost that disappears if the segment is eliminated
24. Which accounting method requires matching revenues with the expenses incurred to generate them? → Accrual basis
25. What is a pay stub required to show under most state laws? → Gross pay, deductions, and net pay
26. What is the difference between gross income and net income? → Gross income is before deductions, while net income is after deductions.
27. In a standard costing system, a favorable material price variance occurs when: → Actual price paid is less than the standard price
28. In IAB practice, what happens when regulations are updated or changed? → Professionals must update their knowledge and practices to meet new requirements
29. The balanced scorecard typically includes which four perspectives? → Financial, Customer, Internal Process, Learning & Growth
30. How long must employers generally retain payroll records such as time cards, wage rates, and tax withholding information under federal law? → 3 years