ABA Cheat Sheet 2026

The 30 highest-yield ABA 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 'fraud triangle'? → Three conditions (pressure, opportunity, rationalization) that typically lead to fraud
2. Which depreciation method allocates the largest depreciation expense in the first year of an asset's useful life? → Double-declining balance
3. Which standard of practice is MOST important for ensuring quality in Tax Preparation & Compliance? → Following evidence-based protocols while adapting to specific circumstances
4. What is included in shareholders' equity on the balance sheet? → Common stock, retained earnings, and additional paid-in capital.
5. Which principle requires that the same accounting treatment be applied to similar items each accounting period? → Consistency principle
6. Which of the following is considered an intangible asset? → Patent
7. What is a promissory note in credit management? → A written promise to pay a specific amount at a specific time
8. Which concept justifies recording assets at their original purchase price rather than current market value? → Historical cost principle
9. Which audit procedure involves independently verifying account balances by contacting third parties directly? → Confirmation
10. Bank reconciliation adjustments for deposits in transit should be: → Added to the bank statement balance
11. A company using the LIFO inventory method during a period of rising prices will report: → Lower net income and lower inventory than FIFO
12. Under the FUTA rules, employers pay federal unemployment tax on the first _____ of each employee's wages annually. → $7,000
13. Analytical procedures used during the planning phase of an audit are primarily intended to: → Identify unusual relationships that may indicate risk areas
14. In a standard cost system, a favorable direct labor efficiency variance results when: → Standard hours allowed exceed actual hours worked
15. Which of the following best describes a subsidiary ledger? → A detailed ledger that supports a control account in the general ledger
16. Under the direct write-off method, bad debt expense is recorded when: → A specific account is determined to be uncollectible
17. Outstanding checks on a bank reconciliation are: → Subtracted from the bank statement balance
18. Which penalty applies when an employer fails to timely deposit federal payroll taxes? → Failure-to-deposit penalty (2%–15% based on lateness)
19. Which of the following types of income is generally exempt from federal income tax? → Workers' compensation benefits received due to a job-related injury
20. A principal who ratifies an unauthorized act by an agent assumes liability as if the act had been authorized from the beginning under which doctrine? → Ratification
21. Which depreciation method assigns equal expense amounts each year over an asset's useful life? → Straight-line
22. Which of the following is an 'above-the-line' deduction for an individual taxpayer? → Student loan interest
23. Which of the following is an example of a batch-level activity in activity-based costing? → Processing a purchase order for a production run
24. What happens to a business's cash flow when Days Sales Outstanding (DSO) increases? → Cash flow decreases because collections are slower
25. Inherent risk is best defined as the susceptibility of an assertion to: → Material misstatement assuming no related internal controls
26. A vendor issues a credit memo to a buyer. What effect does this have on the buyer's accounts payable balance? → Decreases it
27. An employee's gross pay is $3,000 and their Section 125 cafeteria plan deduction is $400. What is the correct FICA taxable wage base for this pay period? → $2,600
28. Which of the following would NOT be included in the cost of a self-constructed asset? → General administrative overhead unrelated to the asset
29. Which of the following best describes the going concern assumption? → A business will continue operating indefinitely into the future
30. When must an employer file Form 941 for Q1 (January–March)? → April 30