If you were a zoologist and knew the correct names for groups of animal types you might say a cat IS A longlatinwordforanimalgroupwithtails. The exam questions tend to be of the type whereby you get a text description of a potential hierarchy and you get questions as to what ought to be a field and what ought to be a new class type as a child. These questions can look complex at first glance, but if you read them carefully they are fairly obvious. The Java 1.1 objectives did not specifically mention encapsulation, though you would be hard pressed to study Java and not come across the concept. Encapsulation involves separating the interface of a class from its implementation.
Encapsulation involves hiding data of a class and allowing access only through a public interface.
Do not be mislead into thinking that the access control system is to do with security. It is not designed to prevent a programmer getting at variables, it is to help avoid unwanted modification. The standard approach using the Color example above would be for the Color field cBack to be private. A private field is only visible from within the current class. This means a programmer cannot accidentally write code from another class that changes the value.