CERTIFIED LEGAL MANAGER ALA EXAM 2024-2025
QUESTIONS AND CORRECT ANSWERS
Statutory Fringe Benefits: Benefits that have been exempted from income tax- ation by
law to encourage employers to provide these benefits the their employees, such as
medical insurance, disability and group-term life insurance.
Situational Judgment Tests: Tests that measure a person's judgment in work settings.
Situational Leadership: A management theory stating that different situations call for
different leadership styles and that essentially there is no one best way to lead.
Skill-Based Pay: A salary differentiation system that bases compensation on an
individual's education, experience, knowledge, skills or specialized training.
Soft Disbursements: Internal costs that have a predetermined billing value such as copy
and facsimile.
Special Form Coverage: Insurance that typically covers all risks, including theft, unless
specifically excluded from the policy.
Spreadsheet: Computer software used to create worksheets consisting of columns and
rows.
Claim: A demand made by the insured, or the insured's beneficiary for payment of the
benefits provided by the contract.
Claims Made Coverage: 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.
Civil Rights Act of 1991: 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.
Chronological Filing: Filing in sequence according to date.
Chronological Files: Copies of outgoing correspondence arranged in chrono- logical
order.
Certified Destruction: Shredding of paper or media by a bonded company.
, Central Tendency Error: Occurs when a rater gives all employees a score within a narrow
range in the middle of the scale.
Cash Flow: The overall amount of cash generated by the company that is available to
the company to manage the business.
Cash Basis Accounting: Revenue is recorded when the cash is received and expenses
are recorded when the bills are actually paid.
Case Files: Groupings of records that pertain to a specific person, place, thing, event or
program.
Carryovers: Provision of tax law that allows current losses or certain tax credits to be
utilized in the tax returns of future periods.
Capped Fees: Client pays law firm up to a specified maximum amount, but no more.
Capital Gain: Portion of the total gain recognized on the sale or exchange of a non-
inventory asset which is not taxed as ordinary income.
Capital Budget: The portion of the budget process in which management focuses
specifically on the company's fixed asset needs.
Capital Assets: Usually synonymous with fixed or tangible assets including land,
buildings, machinery and equipment, furniture and fixtures and vehicles.
Cafeteria Plan: 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.
Byte: Eight bits and the required amount of computer storage needed for one keyboard
stroke; KB = ~ 1K bytes; MG = ~ 1M bytes; GB = ~ 1B bytes
Appraisal: An estimate of the economic value of a resource, liability, equity, or entity
made by an expert after appropriate physical examination, comparative pricing and
engineering review.
Agreement for Lease: A contract to enter into a lease which in order to be enforceable
either must be evidenced in writing and signed by the person against whom action is
taken for the breach of the alleged contract and there must be a sufficient act of part
performance.
Business Interruption Insurance: 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.
QUESTIONS AND CORRECT ANSWERS
Statutory Fringe Benefits: Benefits that have been exempted from income tax- ation by
law to encourage employers to provide these benefits the their employees, such as
medical insurance, disability and group-term life insurance.
Situational Judgment Tests: Tests that measure a person's judgment in work settings.
Situational Leadership: A management theory stating that different situations call for
different leadership styles and that essentially there is no one best way to lead.
Skill-Based Pay: A salary differentiation system that bases compensation on an
individual's education, experience, knowledge, skills or specialized training.
Soft Disbursements: Internal costs that have a predetermined billing value such as copy
and facsimile.
Special Form Coverage: Insurance that typically covers all risks, including theft, unless
specifically excluded from the policy.
Spreadsheet: Computer software used to create worksheets consisting of columns and
rows.
Claim: A demand made by the insured, or the insured's beneficiary for payment of the
benefits provided by the contract.
Claims Made Coverage: 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.
Civil Rights Act of 1991: 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.
Chronological Filing: Filing in sequence according to date.
Chronological Files: Copies of outgoing correspondence arranged in chrono- logical
order.
Certified Destruction: Shredding of paper or media by a bonded company.
, Central Tendency Error: Occurs when a rater gives all employees a score within a narrow
range in the middle of the scale.
Cash Flow: The overall amount of cash generated by the company that is available to
the company to manage the business.
Cash Basis Accounting: Revenue is recorded when the cash is received and expenses
are recorded when the bills are actually paid.
Case Files: Groupings of records that pertain to a specific person, place, thing, event or
program.
Carryovers: Provision of tax law that allows current losses or certain tax credits to be
utilized in the tax returns of future periods.
Capped Fees: Client pays law firm up to a specified maximum amount, but no more.
Capital Gain: Portion of the total gain recognized on the sale or exchange of a non-
inventory asset which is not taxed as ordinary income.
Capital Budget: The portion of the budget process in which management focuses
specifically on the company's fixed asset needs.
Capital Assets: Usually synonymous with fixed or tangible assets including land,
buildings, machinery and equipment, furniture and fixtures and vehicles.
Cafeteria Plan: 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.
Byte: Eight bits and the required amount of computer storage needed for one keyboard
stroke; KB = ~ 1K bytes; MG = ~ 1M bytes; GB = ~ 1B bytes
Appraisal: An estimate of the economic value of a resource, liability, equity, or entity
made by an expert after appropriate physical examination, comparative pricing and
engineering review.
Agreement for Lease: A contract to enter into a lease which in order to be enforceable
either must be evidenced in writing and signed by the person against whom action is
taken for the breach of the alleged contract and there must be a sufficient act of part
performance.
Business Interruption Insurance: 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.
