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. What is the tax treatment of employer-provided health insurance premiums paid on behalf of employees? → Excluded from employee's gross income and deductible by employer
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. Which payroll tax form must employers file quarterly to report wages paid, federal income tax withheld, and Social Security and Medicare taxes? → Form 941
14. What is a 'qualified audit opinion' based on material misstatement? → An opinion stating that except for a specific matter, the financials are fairly presented
15. Which government agency oversees tax collection in the UK? → HMRC
16. Which IFA ethical principle requires auditors to avoid conflicts of interest and remain objective? → Independence and objectivity
17. What is the role of an audit committee in a US-listed company? → To oversee financial reporting and the external audit process
18. What is 'tone at the top' in corporate governance? → The ethical culture, values, and behaviors modeled and communicated by senior leadership
19. Which financial statement shows changes in a company's cash position over a period? → Statement of cash flows
20. Which of the following is NOT a component of the income statement? → Assets
21. Which of the following is an example of a fixed cost? → Rent
22. Which document outlines the terms and objectives agreed between the auditor and client before the audit begins? → Engagement letter
23. Which type of audit focuses on whether public funds have been used economically and efficiently? → Value-for-money (performance) audit
24. What is the main goal of anti-money laundering (AML) regulations? → To detect and prevent financial crimes
25. When is VAT typically due to be filed in the UK for quarterly returns? → One month and 7 days after the quarter
26. What is the primary purpose of management accounting? → To assist in internal decision-making
27. Which profitability ratio measures the return earned on shareholders' investment? → Return on equity (ROE)
28. What is the primary role of a company's board of directors? → To provide strategic oversight, monitor management, and safeguard shareholder interests
29. What does portfolio diversification achieve for an investor? → Reduces unsystematic risk by combining assets whose returns are not perfectly correlated
30. What does 'leverage' mean in a business finance context? → The use of borrowed funds to amplify potential returns and risks