IFA Cheat Sheet 2026

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

1. How are assets typically valued in a forced liquidation scenario? → At net realizable value, which is typically below fair market value
2. Which financial ratio measures how efficiently a company uses its assets to generate revenue? → Asset turnover ratio
3. What is a break-even analysis used for in decision making? → Determining the sales level at which total revenue equals total costs
4. In a Chapter 7 liquidation, which class of creditors is paid FIRST from the estate's assets? → Secured creditors, to the extent of their collateral value
5. Under IFRS, what is the principle of 'faithful representation'? → It ensures unbiased and accurate financial reporting
6. In cost-volume-profit (CVP) analysis, what is the break-even point? → Point where total costs equal total revenues
7. Why is continuing professional development (CPD) important for accountants? → To maintain competence and relevance
8. Which ratio best measures a company's ability to meet its immediate short-term obligations without selling inventory? → Quick (acid-test) ratio
9. What is working capital and why is it important? → Current assets minus current liabilities; it measures short-term operational liquidity
10. What is the primary objective of an external audit? → To provide an independent opinion on the truth and fairness of financial statements
11. What is net present value (NPV) used for in financial decision making? → Determining whether an investment creates value by discounting future cash flows
12. What is a rights issue in corporate finance? → An offer of new shares to existing shareholders in proportion to their current holdings
13. What is a 'qualified audit opinion' based on material misstatement? → An opinion stating that except for a specific matter, the financials are fairly presented
14. Which government agency oversees tax collection in the UK? → HMRC
15. Which IFA ethical principle requires auditors to avoid conflicts of interest and remain objective? → Independence and objectivity
16. What is the role of an audit committee in a US-listed company? → To oversee financial reporting and the external audit process
17. What is 'tone at the top' in corporate governance? → The ethical culture, values, and behaviors modeled and communicated by senior leadership
18. Which financial statement shows changes in a company's cash position over a period? → Statement of cash flows
19. Which of the following is NOT a component of the income statement? → Assets
20. Which of the following is an example of a fixed cost? → Rent
21. Which document outlines the terms and objectives agreed between the auditor and client before the audit begins? → Engagement letter
22. Which type of audit focuses on whether public funds have been used economically and efficiently? → Value-for-money (performance) audit
23. What is the main goal of anti-money laundering (AML) regulations? → To detect and prevent financial crimes
24. When is VAT typically due to be filed in the UK for quarterly returns? → One month and 7 days after the quarter
25. What is the primary purpose of management accounting? → To assist in internal decision-making
26. Which profitability ratio measures the return earned on shareholders' investment? → Return on equity (ROE)
27. What is the primary role of a company's board of directors? → To provide strategic oversight, monitor management, and safeguard shareholder interests
28. What does portfolio diversification achieve for an investor? → Reduces unsystematic risk by combining assets whose returns are not perfectly correlated
29. What is a 'proof of claim' in bankruptcy proceedings? → A formal written statement filed by a creditor asserting the amount owed by the debtor
30. What does 'leverage' mean in a business finance context? → The use of borrowed funds to amplify potential returns and risks