Page 1 of 23
Certified Legal Manager ALA Exam ACTUAL EXAM
ALL 150 QUESTIONS AND CORRECT ANSWERS
LATEST UPDATE THIS YEAR
QUESTION: The overall amount of cash generated by the company that is available to the
company to manage the business. - ANSWER-Cash Flow
QUESTION: Revenue is recorded when the cash is received and expenses are recorded when
the bills are actually paid. - ANSWER-Cash Basis Accounting
QUESTION: Groupings of records that pertain to a specific person, place, thing, event or
program. - ANSWER-Case Files
QUESTION: Provision of tax law that allows current losses or certain tax credits to be utilized in
the tax returns of future periods. - ANSWER-Carryovers
QUESTION: Client pays law firm up to a specified maximum amount, but no more. - ANSWER-
Capped Fees
1
, Page 2 of 23
QUESTION: Portion of the total gain recognized on the sale or exchange of a non-inventory
asset which is not taxed as ordinary income. - ANSWER-Capital Gain
QUESTION: The portion of the budget process in which management focuses specifically on the
company's fixed asset needs. - ANSWER-Capital Budget
QUESTION: Usually synonymous with fixed or tangible assets including land, buildings,
machinery and equipment, furniture and fixtures and vehicles. - ANSWER-Capital Assets
QUESTION: 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. - ANSWER-Cafeteria Plan
QUESTION: Eight bits and the required amount of computer storage needed for one keyboard
stroke; KB = ~ 1K bytes; MG = ~ 1M bytes; GB = ~ 1B bytes - ANSWER-Byte
2
, Page 3 of 23
QUESTION: 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. - ANSWER-Business Interruption Insurance
Q; 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. - ANSWER-Statutory Fringe Benefits
QUESTION: Tests that measure a person's judgment in work settings. - ANSWER-Situational
Judgment Tests
QUESTION: A management theory stating that different situations call for different leadership
styles and that essentially there is no one best way to lead. - ANSWER-Situational Leadership
QUESTION: A salary differentiation system that bases compensation on an individual's
education, experience, knowledge, skills or specialized training. - ANSWER-Skill-Based Pay
3
Certified Legal Manager ALA Exam ACTUAL EXAM
ALL 150 QUESTIONS AND CORRECT ANSWERS
LATEST UPDATE THIS YEAR
QUESTION: The overall amount of cash generated by the company that is available to the
company to manage the business. - ANSWER-Cash Flow
QUESTION: Revenue is recorded when the cash is received and expenses are recorded when
the bills are actually paid. - ANSWER-Cash Basis Accounting
QUESTION: Groupings of records that pertain to a specific person, place, thing, event or
program. - ANSWER-Case Files
QUESTION: Provision of tax law that allows current losses or certain tax credits to be utilized in
the tax returns of future periods. - ANSWER-Carryovers
QUESTION: Client pays law firm up to a specified maximum amount, but no more. - ANSWER-
Capped Fees
1
, Page 2 of 23
QUESTION: Portion of the total gain recognized on the sale or exchange of a non-inventory
asset which is not taxed as ordinary income. - ANSWER-Capital Gain
QUESTION: The portion of the budget process in which management focuses specifically on the
company's fixed asset needs. - ANSWER-Capital Budget
QUESTION: Usually synonymous with fixed or tangible assets including land, buildings,
machinery and equipment, furniture and fixtures and vehicles. - ANSWER-Capital Assets
QUESTION: 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. - ANSWER-Cafeteria Plan
QUESTION: Eight bits and the required amount of computer storage needed for one keyboard
stroke; KB = ~ 1K bytes; MG = ~ 1M bytes; GB = ~ 1B bytes - ANSWER-Byte
2
, Page 3 of 23
QUESTION: 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. - ANSWER-Business Interruption Insurance
Q; 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. - ANSWER-Statutory Fringe Benefits
QUESTION: Tests that measure a person's judgment in work settings. - ANSWER-Situational
Judgment Tests
QUESTION: A management theory stating that different situations call for different leadership
styles and that essentially there is no one best way to lead. - ANSWER-Situational Leadership
QUESTION: A salary differentiation system that bases compensation on an individual's
education, experience, knowledge, skills or specialized training. - ANSWER-Skill-Based Pay
3
