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. What are the main financial statements used in accounting? → Balance sheet, income statement, and cash flow statement.
5. Which regulatory requirement is UNIVERSAL across all International Association of Bookkeepers Certification practice settings? → Maintaining current certification and meeting continuing education requirements
6. What does the balance sheet show? → The company's assets, liabilities, and equity.
7. What is the significance of ethical behavior in business? → To create a fair and transparent environment that benefits stakeholders.
8. Why is confidentiality important in business ethics? → To maintain trust and prevent misuse of sensitive information.
9. Which journal entry correctly records the employer's matching FICA taxes for Social Security and Medicare? → Debit: FICA Tax Expense; Credit: FICA Taxes Payable
10. What is the Medicare tax rate withheld from employee wages? → 1.45%
11. Which concept describes the illegal practice of classifying workers as independent contractors to avoid payroll tax obligations when they function as employees? → Worker misclassification
12. Which of the following is NOT subject to FICA (Federal Insurance Contributions Act) taxes? → Employer-paid health insurance premiums
13. What is the difference between gross income and net income? → Gross income is before deductions, while net income is after deductions.
14. In IAB practice, what happens when regulations are updated or changed? → Professionals must update their knowledge and practices to meet new requirements
15. How long must employers generally retain payroll records such as time cards, wage rates, and tax withholding information under federal law? → 3 years
16. What documentation is MOST critical to maintain for safety compliance in the International Association of Bookkeepers Certification field? → Incident reports, training records, and inspection logs
17. When a IAB professional makes an error in documentation, the CORRECT procedure is to: → Draw a single line through the error, initial, date, and write the correction
18. What is the purpose of a tax audit? → To verify the accuracy of tax filings and ensure compliance.
19. What is the purpose of taxation in a business? → To contribute to government revenue and support public services.
20. When a IAB professional makes an error in documentation, the CORRECT procedure is to: → Draw a single line through the error, initial, date, and write the correction
21. How does the IAB body of knowledge relate to daily professional practice? → It provides the foundational framework that guides decision-making and standard practices
22. What is the purpose of management accounting? → To help managers make decisions and improve performance.
23. Why is the statement of cash flows important for investors? → It shows how the company manages its cash and investments.
24. What is the PRIMARY reason for regulatory compliance in the International Association of Bookkeepers Certification profession? → To protect public safety, ensure quality standards, and maintain professional integrity
25. What does the term 'contra account' mean? → An account with a balance opposite to its paired account, reducing its net value
26. What is tax evasion? → The illegal act of avoiding taxes through fraudulent means.
27. In IAB practice, what happens when regulations are updated or changed? → Professionals must update their knowledge and practices to meet new requirements
28. Which of the following best describes 'depreciation' in accounting? → The systematic allocation of a tangible asset's cost over its useful life
29. What is the MOST effective way for new IAB professionals to build competency in their field? → Combining formal education, mentored practice, and ongoing professional development
30. How is financial accounting different from managerial accounting? → Financial accounting provides reports for external stakeholders.