MB-920 Practice Test 18 — 15 Questions

Question 1

You are the Dynamics 365 Finance consultant for Contoso Ltd., a manufacturing company that uses standard cost inventory valuation. The company recently implemented a new production line for a high-volume product. The production manager reports that the actual manufacturing costs significantly exceed the standard costs set for the product. You need to analyze the variance and adjust the standard costs for future periods. The company requires that any adjustment to standard costs be effective from the start of the next fiscal year, which begins in three months. Additionally, the inventory on hand must be revalued at the new standard cost. What should you do?

Choose an answer to begin — your selection is scored in the full session.

Accepted Answer

Create a costing version with the new standard costs and set the effective date to the start of the next fiscal year. Then run a cost revaluation journal to revalue inventory at the new cost.. To adjust standard costs effective from the start of the next fiscal year and revalue on-hand inventory, you must create a new costing version with the new standard costs and set the effective date to the next fiscal year. Then, run a cost revaluation journal to revalue inventory at the new cost. This ensures the new standard costs are used from the specified date and inventory is properly revalued.

Answer

Use an inventory adjustment journal to revalue the on-hand inventory to the new standard cost and change the item's standard cost in the item master.

Answer

Create a standard cost revaluation journal for the current period and update the standard cost in the costing version with immediate effect.

Answer

Post the manufacturing variances to a variance account and close the variances to cost of goods sold at year-end.

Question 2

A company implements Dynamics 365 Supply Chain Management. Which THREE features are part of the core capabilities of the warehouse management module? (Choose three.)

Accepted Answer

Location directives. Location directives (A) are a core warehouse management capability because they define the rules that determine where inventory is put away and picked, driving directed put-away and picking work in Dynamics 365 Supply Chain Management. Cycle counting (D) is also core to warehouse management, as it provides periodic, location-based inventory counting to maintain accuracy without halting operations. Wave processing (E) is core as well, since waves group and release picking work to the warehouse floor, enabling coordinated outbound processing. Procurement catalogs (B) belong to the procurement and sourcing module, and demand forecasting (C) is part of master planning, so neither is a warehouse management core feature.

Answer

Procurement catalogs

Answer

Demand forecasting

Question 3

A manufacturing company uses Dynamics 365 Supply Chain Management. The production planner notices that a planned production order for 1,000 units of finished good FG-100 has a material shortage for component RM-200. The planner wants to automatically create purchase orders for the missing component and reschedule the production order. Which feature should be configured?

Accepted Answer

Master planning. Master planning in Dynamics 365 Supply Chain Management is the feature that automatically generates planned purchase orders for material shortages and reschedules production orders based on demand and supply. Option B is correct because master planning runs net requirements calculations to create the necessary purchase orders for missing components like RM-200 and adjusts the production schedule for FG-100. This ensures material availability aligns with production timelines.

Answer

Warehouse management

Answer

Product configuration

Answer

Inventory management

Question 4

Drag and drop the steps to create a new customer record in Dynamics 365 Sales in the correct order.

Accepted Answer

Step 1: Open Dynamics 365 Sales app, Step 2: Navigate to customer list, Step 3: Click New to create a new customer record, Step 4: Fill in required fields, Step 5: Save the record.. Creating a customer record starts with opening the app, then navigating to the customer list, creating a new record, filling in details, and saving.

Answer

Step 1: Open Dynamics 365 Sales app, Step 2: Navigate to customer list, Step 3: Click New to create a new customer record, Step 4: Save the record, Step 5: Fill in required fields.

Answer

Step 1: Open Dynamics 365 Sales app, Step 2: Click New to create a new customer record, Step 3: Navigate to customer list, Step 4: Fill in required fields, Step 5: Save the record.

Answer

Step 1: Navigate to customer list, Step 2: Open Dynamics 365 Sales app, Step 3: Click New to create a new customer record, Step 4: Fill in required fields, Step 5: Save the record.

Question 5

Which TWO of the following are valid warehouse management processes in Dynamics 365 Supply Chain Management?

Accepted Answer

Receiving and putaway. Option A (Receiving and putaway) is correct because inbound warehouse management processes in Dynamics 365 Supply Chain Management cover registering received items and directing them to appropriate locations via putaway work, including license plate and location directives. Option C (Picking and shipment) is correct because outbound warehouse management processes include generating picking work to fulfill sales or transfer orders and shipping them out, with packing and staging steps. The other options are not valid warehouse management processes in this context: vendor returns are handled as return order processes rather than core WMS processes, transfer order creation is an inventory/order management activity, and production consumption and reporting are manufacturing execution processes, not warehouse management processes.

Answer

Vendor returns

Answer

Transfer order creation

Answer

Production consumption and production reporting

Question 6

A company uses Dynamics 365 Commerce. They notice that product recommendations are not appearing on the e-commerce site. What must be enabled?

Accepted Answer

Recommendations service. Product recommendations in Dynamics 365 Commerce require the Recommendations service to be enabled and configured. This service uses AI and machine learning to generate personalized product suggestions based on user behavior, catalog data, and transaction history. Without it, the e-commerce site cannot display recommendation widgets, even if other services like search or content delivery are operational.

Answer

Customer insights

Answer

Content delivery network

Answer

Search service

Question 7

A company is implementing Dynamics 365 Finance and needs to track expenses by department and project. What dimension combination should be used?

Accepted Answer

Department and Project. Financial dimensions in Dynamics 365 Finance are used to tag transactions for reporting and analysis. To track expenses by both department and project, the financial dimension combination must include Department and Project as active dimensions on the account structure. This allows each posting to carry both attributes, enabling reports that slice expenses by department and drill into project-level detail.

Answer

Department and Vendor

Answer

Item and Project

Answer

Location and Cost center

Question 8

A company uses Dynamics 365 Finance and needs to track expenses by department and project. Which feature should be configured to capture this information on all financial transactions?

Accepted Answer

Financial dimensions.. Financial dimensions allow tracking by department, project, and other dimensions. Option A is wrong because the chart of accounts structures the main accounts but does not capture additional dimensions. Option B is wrong because cost accounting is for internal cost management. Option D is wrong because budgeting is for planning.

Answer

Chart of accounts.

Answer

Cost accounting module.

Answer

Budget control.

Question 9

Refer to the exhibit. A Dynamics 365 Finance system has a tax code configured as shown. A sales invoice line item has a unit price of 100.00 (excluding tax) and the tax code applies. What is the total invoice line amount including tax?

Accepted Answer

119.00. The tax code in the exhibit is configured with a value of 19.00, which represents a 19% sales tax rate. When applied to a line item with a unit price of 100.00 (excluding tax), the tax amount is calculated as 100.00 × 0.19 = 19.00. Therefore, the total invoice line amount including tax is 100.00 + 19.00 = 119.00.

Answer

110.00

Answer

138.00

Answer

100.00

Question 10

A company that produces perishable goods needs to enforce strict lot control and first-expiry-first-out (FEFO) picking. Which configuration in Dynamics 365 Supply Chain Management is essential?

Accepted Answer

Lot control and FEFO picking criteria. Enforcing strict lot control and first-expiry-first-out (FEFO) picking criteria in Dynamics 365 Supply Chain Management requires enabling lot control on the product (via tracking dimension groups) and then setting the FEFO picking criteria on the warehouse location directive. This configuration ensures that items with the nearest expiry date are picked first, which is critical for perishable goods to minimize waste and comply with regulatory requirements.

Answer

Product dimension groups

Answer

Batch attributes

Answer

Serial number control

Question 11

Which TWO are valid options for posting vendor invoices in Dynamics 365 Finance? (Select TWO.)

Accepted Answer

Vendor invoice journal. Option A, Vendor invoice journal, is correct because it is the standard posting method for recording vendor invoices that are not tied to a purchase order, allowing you to enter invoice header and line details directly in the Invoice journal form and post them to the vendor ledger. Option B, Purchase order invoice posting, is correct because it is the primary method for posting vendor invoices that are matched to a purchase order, using the Invoice registration and Invoice approval workflow to perform two-way or three-way matching before posting. Option C, Sales order invoice, is incorrect because it posts invoices to customers (accounts receivable), not vendor invoices. Option D, Vendor payment journal, is incorrect because it is used to settle and pay existing vendor transactions, not to post new vendor invoices. Option E, Production order, is incorrect because it is a manufacturing document used to report and post production activity, not vendor invoice posting.

Answer

Sales order invoice

Answer

Vendor payment journal

Answer

Production order

Question 12

Which THREE of the following are capabilities of the Budgeting module in Dynamics 365 Finance?

Accepted Answer

Budget control to monitor budget consumption. Option A is correct because the Budgeting module provides budget control, which checks and monitors budget consumption against available budget amounts when transactions such as purchase orders or expenses are posted. Option C is correct because budget register entries are the core mechanism in Dynamics 365 Finance for recording, updating, and transferring budget amounts, including original budgets, revisions, and transfers. Option E is correct because budget planning is a Budgeting module capability that lets organizations create budget proposals, use planning processes and workflows, and generate budget plan documents for approval. Option B is not correct because processing vendor invoices is part of the Accounts payable module, not the Budgeting module. Option D is not correct because generating financial statements is handled by Financial reporting, not by the Budgeting module.

Answer

Process vendor invoices

Answer

Generate financial statements

Question 13

A company uses Dynamics 365 Supply Chain Management to manage its supply chain. The procurement manager notices that purchase requisitions are not being converted to purchase orders automatically as expected. The workflow for purchase requisitions is set to auto-approve for amounts under $1,000. Upon investigation, the manager finds that a requisition for $950 is stuck in 'Draft' status. What is the most likely cause?

Accepted Answer

The purchase requisition has not been submitted for review.. In Dynamics 365 Supply Chain Management, a purchase requisition must be explicitly submitted to trigger the workflow. Even if the workflow is configured for auto-approval, the requisition remains in 'Draft' status until the user clicks 'Submit'. The $950 requisition was never submitted, so the auto-approval process never started.

Answer

The workflow requires budget approval for all requisitions.

Answer

The purchase requisition was rejected by the workflow.

Answer

The dollar limit for auto-approval is set to $900.

Question 14

A company wants to use Dynamics 365 Supply Chain Management to automate the process of creating purchase orders based on demand from sales orders. Which process should they use?

Accepted Answer

Master planning. Master planning in Dynamics 365 Supply Chain Management is the engine that calculates net requirements from demand (sales orders, forecasts) and generates planned orders — including purchase orders — to cover that demand. It is the correct process for automating purchase order creation based on sales order demand. The output is planned purchase orders that can be firmed into actual POs.

Answer

Inventory management

Answer

Sales order processing

Answer

Procurement and sourcing

Question 15

Which THREE of the following are valid configurations for intercompany accounting in Dynamics 365 Finance?

Accepted Answer

Elimination rules can be defined to automatically remove intercompany transactions during consolidation.. Option A is correct because Dynamics 365 Finance supports elimination rules that automatically remove intercompany transactions during consolidation, ensuring the consolidated financial statements do not double-count balances. Option C is correct because intercompany journals can be configured to post automatically to both the originating and the counterparty legal entities, using the Due to/Due from accounts. Option E is correct because intercompany sales orders and purchase orders can be automatically generated when an intercompany sales order is created, with the corresponding purchase order created in the counterparty legal entity. Option B is not required, since intercompany transactions can occur between legal entities using different accounting currencies, with currency translation handled by the system. Option D is not a valid requirement, because an intercompany transaction inherently involves two legal entities, not a separate legal entity for each transaction.

Answer

Intercompany transactions must use the same currency.

Answer

Each intercompany transaction must be posted to a separate legal entity.