I believe you are referring to memory as the process run-time , if yes , when you dump the memory , you can see interesting objects and strings . Use the MAT tool with the hprof file . I am not sure if there is a feature to encrypt in memory , but in a realistic scenario , at one point , it has to be in clear-text in mem .
If you are referring to the application sandbox , there is no special encryption applied unless the developer specifies so . You could encrypt any assets using arxan and write code to use this asset/file with the regular java apis ( FileStream .. ) ,but when you extract the apk and look at the asset , it will appear encrypted .
Thanks,
Anto