MB-920 Practice Exam 2 — 20 Questions

Question 1

Which THREE features are available in Dynamics 365 Finance and Operations to support financial reporting?

Accepted Answer

Default financial dimensions. Option A (Default financial dimensions) is correct because financial dimensions are the core building blocks that let transactions be tagged with cost centers, departments, projects, and other segments, and default dimensions automatically populate these segments on ledger entries so reports can slice balances by dimension. Option B (Budget control) is correct because it enforces spending limits against budget register entries and produces budget vs. actual reporting, which is a fundamental financial reporting capability in Dynamics 365 Finance and Operations. Option E (Financial reporting (management reporter)) is correct because it is the dedicated reporting tool that generates balance sheets, income statements, cash flow statements, and other financial statements from ledger and dimension data. Option C (Warehouse slotting) is incorrect because it is a supply chain management feature for optimizing warehouse storage locations, not a financial reporting feature. Option D (Production scheduling) is incorrect because it belongs to manufacturing and production control for sequencing jobs and operations, and has no role in financial reporting.

Answer

Warehouse slotting

Answer

Production scheduling

Question 2

A company uses Dynamics 365 Finance and needs to automate the process of converting purchase requisitions into purchase orders. Which feature should be used?

Accepted Answer

Configure a purchase requisition workflow that automatically generates a purchase order when the requisition is approved.. In Dynamics 365 Finance, the purchase requisition workflow can be configured with a specific step that automatically creates a purchase order upon final approval of the requisition. This is achieved by enabling the 'Purchase order generation' task in the workflow configuration, which converts approved requisition lines into a purchase order without manual intervention. This feature directly addresses the need to automate the conversion process, ensuring efficiency and reducing manual data entry.

Answer

Set up a procurement catalog to define items that can be ordered.

Answer

Enable vendor collaboration to allow vendors to create purchase orders.

Answer

Use the Request for quotation (RFQ) process to select a vendor and create a purchase order.

Question 3

Refer to the exhibit. The JSON shows the configuration for a currency exchange rate in Dynamics 365 Finance. A user reports that when posting a sales invoice in EUR, the system does not automatically convert to USD using the rate shown. What is the most likely reason?

Accepted Answer

The ExchangeRateType is set to Average, which is not used for automatic conversion. The exchange rate type 'Average' is designed for reporting and is not used for automatic conversion during document posting. Dynamics 365 Finance requires a rate type such as 'Spot' or 'Daily' to trigger automatic currency conversion. Option B is incorrect because the CurrencyCode is set correctly to USD (the target currency). Option C is incorrect; a future date does not prevent the rate from being used—it would simply apply when that date becomes current. Option D is incorrect; tolerance settings control rate variance checks, not whether a rate is applied at all.

Answer

The CurrencyCode is set to USD instead of EUR

Answer

The ExchangeRateDate is in the future

Answer

The ExchangeRate is not within the allowed tolerance

Question 4

Refer to the exhibit. A company has configured budget control as shown. A user attempts to create a purchase order for $12,000. The system currently issues a warning but allows the transaction to proceed. The company wants to prevent any transaction exceeding the threshold from being posted. What should the budget controller change in the configuration?

Accepted Answer

Change the ActionOnExceed to Block.. Changing the ActionOnExceed to 'Block' will prevent any transaction exceeding the threshold from being posted. Currently, the action is set to 'Warn', which allows the transaction to proceed with a warning. Option A is incorrect because removing VendorInvoice from the Documents list would disable budget control for that document type, not change the behavior on exceed. Option B is incorrect because changing the BudgetModel to Revised Budget would affect which budget amounts are used for comparison, but not the action when exceeded. Option C is incorrect because changing the BudgetThreshold to $12,000 would match the exact amount, but the system would still issue a warning for amounts exceeding that threshold unless the action is changed to Block.

Answer

Remove VendorInvoice from the Documents list.

Answer

Change the BudgetModel to Revised Budget.

Answer

Change the BudgetThreshold to 12000.

Question 5

A company uses Dynamics 365 Human Resources to manage employee information. They need to ensure that only authorized HR staff can view sensitive personal data. Which feature should they configure?

Accepted Answer

Role-based security. Role-based security (option C) is the correct feature because Dynamics 365 Human Resources uses role-based security to control access to sensitive personal data. By assigning HR staff to specific security roles (e.g., HR Manager, HR Assistant), administrators can grant or deny permissions to view, edit, or delete sensitive fields like Social Security numbers or bank account details. This ensures that only authorized users with the appropriate role can access protected data, aligning with data privacy requirements.

Answer

Employee self-service

Answer

Audit logging

Answer

Workflow automation

Question 6

Which TWO capabilities are part of Dynamics 365 Finance and Operations core financial management? (Choose two.)

Accepted Answer

Accounts payable. Accounts payable is a core financial management capability in Dynamics 365 Finance and Operations. It manages vendor invoices, payments, and expense tracking, ensuring accurate liability recording and timely disbursements. This module integrates directly with the general ledger to maintain financial integrity.

Answer

Field service

Answer

Project management

Answer

Warehouse management

Question 7

A company uses Dynamics 365 Finance. They want to enable Copilot to assist with generating financial reports and answering questions about financial data. What must be configured first?

Accepted Answer

Copilot in Dynamics 365 Finance. B is correct because Copilot in Dynamics 365 Finance must be explicitly enabled and configured as a prerequisite before it can assist with generating financial reports or answering questions about financial data. This involves turning on the Copilot feature within the environment settings and ensuring the necessary permissions and data access are in place.

Answer

Data management framework

Answer

Power BI embedded

Answer

Finance Insights module

Question 8

A company needs to track the cost of raw materials from the moment they are received until the finished goods are sold. Which costing method should they use to ensure that each unit's cost is individually tracked?

Accepted Answer

Specific identification. Specific identification tracks each unit individually. FIFO assumes first-in-first-out. Weighted average uses average cost. Standard cost uses predetermined cost.

Answer

FIFO (first in, first out)

Answer

Standard cost

Answer

Weighted average

Question 9

A company uses Dynamics 365 Supply Chain Management. They want to implement vendor collaboration to allow vendors to view purchase orders and confirm delivery dates. Which feature should they enable?

Accepted Answer

Vendor portal. The Vendor portal (also known as the Vendor collaboration workspace) in Dynamics 365 Supply Chain Management enables external vendors to access specific purchase orders, confirm delivery dates, and respond to order changes directly through a secure web interface. This feature is designed specifically for collaborative scenarios where vendors need to view and update order-related information without requiring full system access.

Answer

Vendor invoice automation

Answer

Vendor bidding

Answer

Procurement and sourcing

Question 10

A company uses Dynamics 365 Finance. They need to generate financial statements that comply with local regulatory requirements. Which feature should they use?

Accepted Answer

Financial reporting. Financial reporting in Dynamics 365 Finance is the dedicated feature for generating financial statements that comply with local regulatory requirements. It provides configurable report definitions, row and column structures, and supports multiple reporting frameworks (e.g., GAAP, IFRS) to meet statutory reporting needs. Unlike transactional modules, Financial reporting is specifically designed to produce balance sheets, income statements, and other regulated reports.

Answer

Accounts payable

Answer

Fixed assets management

Answer

Budgeting

Question 11

A company uses Dynamics 365 Finance for financial management. The CFO wants to use AI to predict customer payment delays and recommend proactive actions. Which feature should you use?

Accepted Answer

Customer payment predictions. Customer payment predictions in Dynamics 365 Finance uses AI to forecast when customers will pay invoices and provides recommendations for proactive actions, such as prioritizing collections. This directly matches the CFO's requirement to predict payment delays and suggest actions.

Answer

Cash flow forecasting

Answer

Microsoft Copilot in Finance

Answer

Budgeting and planning

Question 12

A retail company uses Dynamics 365 Commerce. They need to offer a discount on a specific product line for a limited time. Which pricing mechanism should they configure?

Accepted Answer

Trade agreements. Trade agreements in Dynamics 365 Commerce are the correct pricing mechanism for offering a limited-time discount on a specific product line. They allow you to define price reductions for a specific product or product category for a defined date range, directly controlling the discount amount and validity period. This is the standard way to create time-bound promotional pricing without altering base prices or requiring complex price group assignments.

Answer

Sales tax

Answer

Product categories

Answer

Price groups

Question 13

Which TWO are benefits of using Dynamics 365 Supply Chain Management with IoT integration?

Accepted Answer

Real-time asset tracking. Option C (Real-time asset tracking) is correct because IoT integration in Dynamics 365 Supply Chain Management streams telemetry from connected devices and sensors into the system, allowing inventory, containers, and other assets to be monitored and located continuously as they move through the supply chain. Option E (Predictive maintenance on equipment) is correct because IoT sensor data (vibration, temperature, usage hours) feeds into Dynamics 365 Supply Chain Management's asset management capabilities, enabling condition-based alerts and maintenance scheduling before equipment fails. The remaining options do not belong: A (Real-time customer credit check) is a finance/credit management function unrelated to IoT device data, B (Vendor negotiation) is a procurement relationship activity performed by people rather than an IoT-driven benefit, and D (Automated financial closing) is a financial period-end process that does not depend on IoT telemetry.

Answer

Real-time customer credit check

Answer

Vendor negotiation

Answer

Automated financial closing

Question 14

A manufacturing company uses Dynamics 365 Finance and Operations. They want to automatically post a purchase order once it is approved by a manager. What feature should they configure?

Accepted Answer

Workflow. Workflow in Dynamics 365 Finance and Operations is the correct feature because it allows you to define a business process that automatically triggers an action—such as posting a purchase order—once a specific condition (e.g., manager approval) is met. Workflows can be configured to run without manual intervention, enabling the automatic posting of the purchase order immediately after the approval step completes.

Answer

Electronic reporting

Answer

Batch job

Answer

Budget control

Question 15

A project manager needs to approve time entries submitted by team members. Where in Dynamics 365 Project Operations can the manager approve these time entries?

Accepted Answer

Project Manager Time Approval workspace. The Project Manager Time Approval workspace in Dynamics 365 Project Operations is the dedicated area where project managers can review, approve, or reject time entries submitted by team members. This workspace provides a filtered view of pending time entries and integrates with the project's approval workflow, ensuring that only authorized managers can process time submissions.

Answer

Resource Manager dashboard

Answer

Sales entity

Answer

Project Contract

Question 16

A company uses Dynamics 365 Project Operations to manage project expenses. An employee submits an expense report for a project. The project manager needs to approve the expense report. Where does the project manager perform this approval?

Accepted Answer

Expense Approval workspace. In Dynamics 365 Project Operations, expense report approvals are handled through the Expense Approval workspace. This workspace is specifically designed for project managers and approvers to review, approve, or reject expense reports submitted by project team members. It provides a centralized view of all pending expense approvals tied to projects.

Answer

Project Contract

Answer

Resource Manager dashboard

Answer

Time Approval workspace

Question 17

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

Accepted Answer

Shipping. In Dynamics 365 Supply Chain Management, the core warehouse management processes are inbound receiving, outbound shipping, and internal picking, so options A (Shipping), C (Picking), and D (Receiving) are correct. Receiving handles inbound registration and put-away of arriving goods, picking handles the retrieval of items from storage locations to fulfill demand, and shipping handles the final outbound staging, packing, and loading of goods to customers. Budgeting (B) is a financial planning function in Finance, not a warehouse execution process, and invoicing (E) is an accounts receivable/finance activity rather than a warehouse operation.

Answer

Budgeting

Answer

Invoicing

Question 18

A company is implementing Dynamics 365 Finance and needs to automate the reconciliation of bank transactions. Which feature should be used to match bank statement lines with open bank document lines based on rules?

Accepted Answer

Advanced bank reconciliation. Advanced bank reconciliation in Dynamics 365 Finance allows you to import bank statement lines and automatically match them to open bank document lines (such as checks, deposits, and transfers) using user-defined matching rules. This feature supports rule-based matching (e.g., by amount, date, or reference) and handles complex scenarios like partial matches or tolerance thresholds, making it the correct choice for automating bank transaction reconciliation.

Answer

Bank account reconciliation

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Payment proposal

Answer

Automatic settlement

Question 19

A company uses Dynamics 365 Finance. The finance team needs to ensure that purchase invoices are automatically matched to purchase orders and product receipts before payment is processed. Which feature should be configured?

Accepted Answer

Accounts payable invoice matching. Accounts payable invoice matching (option D) is the correct feature because it automatically compares purchase invoice details (quantities, prices, charges) against the corresponding purchase order and product receipt. This three-way matching ensures that payment is only processed when the invoice matches the order and receipt, preventing overpayment and discrepancies.

Answer

Fixed asset management

Answer

Workflow approval

Answer

Vendor collaboration portal

Question 20

Which THREE of the following are components of the Dynamics 365 Commerce architecture?

Accepted Answer

Retail Server. Retail Server (A) is a core component of the Dynamics 365 Commerce architecture, acting as the middle-tier service that exposes commerce APIs to point of sale (POS), e-commerce, and other clients. Commerce Data Exchange (B) is also a core component, providing the asynchronous data synchronization framework (via CDX jobs such as Download and Upload) between the headquarters (HQ) and channel databases. Channel database (E) is likewise a core architectural component, as each retail channel (e.g., store or online store) has its own channel database that stores channel-specific data and syncs with HQ through CDX. Azure Data Lake (C) and Power BI (D) are not components of the Commerce architecture itself; they are separate Azure/Microsoft analytics and reporting services that may integrate with Dynamics 365 Commerce but are not part of its core architecture.

Answer

Azure Data Lake

Answer

Power BI