CERTIFIED LEGAL MANAGER ALA EXAM NEWEST 2025-2026 COMPLETE 110
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES
[VERIFIED ANSWERS]
Benefits that have been exempted from income taxation by law to encourage employers
to provide these benefits the their employees, such as medical insurance, disability and
group-term life insurance. - CORRECT ANSWER - Statutory Fringe Benefits
Tests that measure a person's judgment in work settings. - CORRECT ANSWER -
Situational Judgment Tests
A management theory stating that different situations call for different leadership styles
and that essentially there is no one best way to lead. - CORRECT ANSWER -
Situational Leadership
A salary differentiation system that bases compensation on an individual's education,
experience, knowledge, skills or specialized training. - CORRECT ANSWER - Skill-
Based Pay
Internal costs that have a predetermined billing value such as copy and facsimile. -
CORRECT ANSWER - Soft Disbursements
Insurance that typically covers all risks, including theft, unless specifically excluded from
the policy. - CORRECT ANSWER - Special Form Coverage
Computer software used to create worksheets consisting of columns and rows. -
CORRECT ANSWER - Spreadsheet
A demand made by the insured, or the insured's beneficiary for payment of the benefits
provided by the contract. - CORRECT ANSWER - Claim
Form of insurance that pays claims presented to the insurer during the term of the policy
or within a specific term after its expiration. It limits liability insurers' exposure to
unknown future liabilities. - CORRECT ANSWER - Claims Made Coverage
Enacted to strengthen and improve federal civil rights laws by providing for damages in
cases of intentional employment discrimination, clarifying provisions regarding disparate
impact actions and for other purposes. - CORRECT ANSWER - Civil Rights Act of 1991
Filing in sequence according to date. - CORRECT ANSWER - Chronological Filing
Copies of outgoing correspondence arranged in chronological order. - CORRECT
ANSWER - Chronological Files
, Shredding of paper or media by a bonded company. - CORRECT ANSWER - Certified
Destruction
Occurs when a rater gives all employees a score within a narrow range in the middle of
the scale. - CORRECT ANSWER - Central Tendency Error
The overall amount of cash generated by the company that is available to the company
to manage the business. - CORRECT ANSWER - Cash Flow
Revenue is recorded when the cash is received and expenses are recorded when the
bills are actually paid. - CORRECT ANSWER - Cash Basis Accounting
Groupings of records that pertain to a specific person, place, thing, event or program. -
CORRECT ANSWER - Case Files
Provision of tax law that allows current losses or certain tax credits to be utilized in the
tax returns of future periods. - CORRECT ANSWER - Carryovers
Client pays law firm up to a specified maximum amount, but no more. - CORRECT
ANSWER - Capped Fees
Portion of the total gain recognized on the sale or exchange of a non-inventory asset
which is not taxed as ordinary income. - CORRECT ANSWER - Capital Gain
The portion of the budget process in which management focuses specifically on the
company's fixed asset needs. - CORRECT ANSWER - Capital Budget
Usually synonymous with fixed or tangible assets including land, buildings, machinery
and equipment, furniture and fixtures and vehicles. - CORRECT ANSWER - Capital
Assets
A benefit plan maintained by an employer for the benefit of the employees under which
each participant has the opportunity to select the benefits they desire. Certain minimum
choices and nondiscriminatory rules apply. - CORRECT ANSWER - Cafeteria Plan
Eight bits and the required amount of computer storage needed for one keyboard
stroke; KB = ~ 1K bytes; MG = ~ 1M bytes; GB = ~ 1B bytes - CORRECT ANSWER -
Byte
Protection for a business owner against losses resulting from a temporary shutdown
because of fire or other insured peril. Provides reimbursement for lost net profits and
necessary continuing expenses. - CORRECT ANSWER - Business Interruption
Insurance
Broadly defined as a management process that seeks to identify potential threats and
impacts to the organization and provide a strategic and operational framework for
QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES
[VERIFIED ANSWERS]
Benefits that have been exempted from income taxation by law to encourage employers
to provide these benefits the their employees, such as medical insurance, disability and
group-term life insurance. - CORRECT ANSWER - Statutory Fringe Benefits
Tests that measure a person's judgment in work settings. - CORRECT ANSWER -
Situational Judgment Tests
A management theory stating that different situations call for different leadership styles
and that essentially there is no one best way to lead. - CORRECT ANSWER -
Situational Leadership
A salary differentiation system that bases compensation on an individual's education,
experience, knowledge, skills or specialized training. - CORRECT ANSWER - Skill-
Based Pay
Internal costs that have a predetermined billing value such as copy and facsimile. -
CORRECT ANSWER - Soft Disbursements
Insurance that typically covers all risks, including theft, unless specifically excluded from
the policy. - CORRECT ANSWER - Special Form Coverage
Computer software used to create worksheets consisting of columns and rows. -
CORRECT ANSWER - Spreadsheet
A demand made by the insured, or the insured's beneficiary for payment of the benefits
provided by the contract. - CORRECT ANSWER - Claim
Form of insurance that pays claims presented to the insurer during the term of the policy
or within a specific term after its expiration. It limits liability insurers' exposure to
unknown future liabilities. - CORRECT ANSWER - Claims Made Coverage
Enacted to strengthen and improve federal civil rights laws by providing for damages in
cases of intentional employment discrimination, clarifying provisions regarding disparate
impact actions and for other purposes. - CORRECT ANSWER - Civil Rights Act of 1991
Filing in sequence according to date. - CORRECT ANSWER - Chronological Filing
Copies of outgoing correspondence arranged in chronological order. - CORRECT
ANSWER - Chronological Files
, Shredding of paper or media by a bonded company. - CORRECT ANSWER - Certified
Destruction
Occurs when a rater gives all employees a score within a narrow range in the middle of
the scale. - CORRECT ANSWER - Central Tendency Error
The overall amount of cash generated by the company that is available to the company
to manage the business. - CORRECT ANSWER - Cash Flow
Revenue is recorded when the cash is received and expenses are recorded when the
bills are actually paid. - CORRECT ANSWER - Cash Basis Accounting
Groupings of records that pertain to a specific person, place, thing, event or program. -
CORRECT ANSWER - Case Files
Provision of tax law that allows current losses or certain tax credits to be utilized in the
tax returns of future periods. - CORRECT ANSWER - Carryovers
Client pays law firm up to a specified maximum amount, but no more. - CORRECT
ANSWER - Capped Fees
Portion of the total gain recognized on the sale or exchange of a non-inventory asset
which is not taxed as ordinary income. - CORRECT ANSWER - Capital Gain
The portion of the budget process in which management focuses specifically on the
company's fixed asset needs. - CORRECT ANSWER - Capital Budget
Usually synonymous with fixed or tangible assets including land, buildings, machinery
and equipment, furniture and fixtures and vehicles. - CORRECT ANSWER - Capital
Assets
A benefit plan maintained by an employer for the benefit of the employees under which
each participant has the opportunity to select the benefits they desire. Certain minimum
choices and nondiscriminatory rules apply. - CORRECT ANSWER - Cafeteria Plan
Eight bits and the required amount of computer storage needed for one keyboard
stroke; KB = ~ 1K bytes; MG = ~ 1M bytes; GB = ~ 1B bytes - CORRECT ANSWER -
Byte
Protection for a business owner against losses resulting from a temporary shutdown
because of fire or other insured peril. Provides reimbursement for lost net profits and
necessary continuing expenses. - CORRECT ANSWER - Business Interruption
Insurance
Broadly defined as a management process that seeks to identify potential threats and
impacts to the organization and provide a strategic and operational framework for
