MB-920 Practice Exam 3 — 20 Questions

Question 1

A company uses Dynamics 365 Project Operations. They need to track project costs and revenue. Which THREE components are essential?

Accepted Answer

Time and expense entry. Time and expense entry (B) is essential because Project Operations captures actual labor and non-labor costs through timesheets and expense reports, which feed the project's cost and revenue actuals. Revenue recognition (C) is essential because Project Operations must recognize revenue for projects, supporting both time-and-materials and fixed-price billing methods to correctly reflect earned revenue. Project cost tracking (D) is essential because the core requirement is to monitor project costs against budgets, including actuals from time, expenses, and materials, enabling profitability analysis. Resource management (A) is not among the marked correct answers, and while useful for staffing, it is not strictly essential to tracking costs and revenue. Fixed asset management (E) is unrelated to project cost and revenue tracking, as it concerns depreciating capital assets rather than project financials.

Answer

Resource management

Answer

Fixed asset management

Question 2

A manufacturing company uses Dynamics 365 Finance and Operations. They want to automate the generation of purchase orders based on inventory levels falling below a reorder point. Which feature should they configure?

Accepted Answer

Safety stock and reorder point planning. The 'Safety stock and reorder point planning' feature in Dynamics 365 Finance and Operations uses item coverage settings to automatically generate planned purchase orders when projected inventory falls below the defined reorder point. This is part of master planning, which calculates replenishment proposals based on inventory levels, lead times, and demand forecasts.

Answer

Inventory closing and adjustment

Answer

Inventory cycle counting

Answer

Purchase requisition workflow

Question 3

A company uses Dynamics 365 Finance and Operations. They need to ensure that all purchase orders over $10,000 require approval from a manager. What feature should they configure?

Accepted Answer

Workflows. Workflows in Dynamics 365 Finance and Operations allow you to define automated business processes that route documents, such as purchase orders, for approval based on conditions like amount thresholds. By configuring a purchase order workflow with a condition that triggers approval when the total exceeds $10,000, you ensure manager approval is required for high-value orders.

Answer

Budget control

Answer

Audit policies

Answer

Policy rules

Question 4

A multinational corporation using Dynamics 365 Finance needs to revalue foreign currency bank accounts at month-end. The finance manager wants to automate this process and ensure that exchange rate differences are posted to the correct accounts. What is the best approach?

Accepted Answer

Use the Foreign currency revaluation feature in General ledger.. The Foreign currency revaluation feature in Dynamics 365 Finance is specifically designed to revalue foreign currency bank accounts and ledger accounts at period-end, automatically calculating exchange rate differences and posting them to designated gain/loss accounts. It supports automation through batch jobs and ensures compliance with accounting standards by using configured exchange rate types. This is the standard, auditable approach for month-end revaluation.

Answer

Create manual journal entries for each bank account using the month-end exchange rate.

Answer

Use the General journal to post exchange rate adjustments.

Answer

Configure exchange rate types for each currency pair.

Question 5

A company uses Dynamics 365 Supply Chain Management. They want to enable a vendor to manage their own inventory at the customer's site (consignment inventory). What process should they set up?

Accepted Answer

Consignment inventory. Consignment inventory in Dynamics 365 Supply Chain Management allows a vendor to own stock that is physically located at the customer's site. The customer only pays for the inventory when it is consumed or transferred to their ownership. Setting up the consignment inventory process enables the vendor to manage replenishment and visibility of their stock at the customer location through vendor collaboration features.

Answer

Vendor collaboration

Answer

Purchase order with drop shipment

Answer

Transfer order

Question 6

Refer to the exhibit. A Dynamics 365 Finance and Operations administrator reviews a batch job configuration. The job is scheduled to run daily. What is the purpose of this batch job?

Accepted Answer

Post recurring invoices automatically. The batch job configuration shown is for the 'Recurring invoices' process in Dynamics 365 Finance and Operations. When a batch job is set to run daily with the action 'Post,' its purpose is to automatically post recurring invoices that have been previously set up in the recurring invoice template. This automates the posting step, eliminating the need for manual intervention each period.

Answer

Generate recurring invoices

Answer

Send invoice payment reminders

Answer

Print recurring invoices

Question 7

Which TWO of the following are valid project types in Dynamics 365 Project Operations? (Choose two.)

Accepted Answer

Time and Material. In Dynamics 365 Project Operations, the two valid project types are Time and Material (option B) and Fixed Price (option D). Time and Material projects bill the customer based on actual time and materials consumed, using chargeable and non-chargeable transaction types, and are the default project type when creating a project. Fixed Price projects bill the customer a predetermined contract amount regardless of actual costs, and they use billing milestones or fixed-price invoice schedules to recognize revenue. Options A (External), C (Internal), and E (Investment) are not project types in Project Operations; while internal or investment projects may be modeled using non-billable Time and Material projects, they are not distinct project type values in the system.

Answer

External

Answer

Internal

Answer

Investment

Question 8

A company uses Dynamics 365 Supply Chain Management with process manufacturing. They need to manage byproducts and co-products in a production order. Which functionality should they use?

Accepted Answer

Formula with co-products and by-products. In process manufacturing, co-products and by-products are managed using a formula, not a bill of materials (BOM). The formula defines the production recipe, including the main output, co-products (intended secondary outputs), and by-products (unavoidable secondary outputs). This allows the system to automatically credit or cost these outputs during production order processing.

Answer

Bill of materials (BOM)

Answer

Location directives

Answer

Transfer orders

Question 9

A company is implementing Dynamics 365 Finance and needs to manage vendor payments efficiently. Which TWO features should be used to automate payment processing and reduce manual effort?

Accepted Answer

Electronic payment formats. Electronic payment formats (A) are correct because they let Dynamics 365 Finance generate payment files in the bank-specific layouts required for electronic funds transfer, eliminating the manual creation of payment files and enabling automated transmission to the bank. Payment proposals (D) are correct because they let you generate suggested vendor payments based on criteria such as due date, cash discount, and vendor group, which automates the selection of invoices to pay and reduces manual effort in deciding what to pay. Vendor invoice pool (B) is a holding area for pending vendor invoices awaiting approval or matching, not a payment automation feature. Vendor hold (C) is used to block a vendor from being included in transactions or payments, which restricts rather than automates processing. Payment calendar (E) defines valid payment dates and due date calculations, but it does not itself automate payment generation or file creation.

Answer

Vendor invoice pool

Answer

Vendor hold

Answer

Payment calendar

Question 10

A company uses Dynamics 365 Finance. They need to generate financial statements that comply with international accounting standards. Which configuration should they use?

Accepted Answer

Financial reporting. Financial reporting in Dynamics 365 Finance is the dedicated configuration for creating, managing, and generating financial statements that comply with international accounting standards such as IFRS. It uses the Financial Reporting module (formerly Management Reporter) to produce balance sheets, income statements, and other reports with multi-currency and multi-entity consolidation support, ensuring compliance with regulatory requirements.

Answer

Budgeting

Answer

General ledger

Answer

Tax engine

Question 11

An organization needs to track the budget versus actual expenses for each department in real time. Which Dynamics 365 Finance feature should be used?

Accepted Answer

Budget control. Budget control in Dynamics 365 Finance is specifically designed to monitor budget versus actual expenses in real time. It checks whether budget funds are available before allowing a transaction to be posted, providing immediate feedback and preventing overspending.

Answer

Budget planning

Answer

General ledger

Answer

Financial reports

Question 12

A company uses Dynamics 365 Finance and Operations. They need to set up financial dimensions for cost centers and departments. Which TWO statements about financial dimensions are correct?

Accepted Answer

Financial dimensions are linked to main accounts.. Financial dimensions are linked to main accounts to provide additional segmentation and analytical capabilities in Dynamics 365 Finance and Operations. This linkage allows transactions to be tracked and reported across multiple dimensions, such as cost centers and departments, enabling detailed financial analysis and compliance.

Answer

Financial dimensions are automatically derived from vendor master.

Answer

Financial dimensions are used only in the chart of accounts.

Answer

Financial dimensions cannot be used with advanced rules.

Question 13

A company uses Dynamics 365 Human Resources (HR) and wants to ensure that new employees are automatically assigned to the correct compensation plan based on their job and department. What must be configured?

Accepted Answer

Define eligibility rules in the compensation plan to automatically assign based on job and department. In Dynamics 365 Human Resources, eligibility rules within a compensation plan define the criteria (such as job and department) that automatically assign employees to the correct plan upon hire. This ensures that the system evaluates the employee's attributes and applies the appropriate compensation structure without manual intervention, leveraging the built-in eligibility engine.

Answer

Implement a hiring workflow that triggers an email to HR to manually assign the compensation plan

Answer

Set up a compensation structure for each position individually

Answer

Configure the employee self-service portal to allow managers to assign compensation plans

Question 14

A company wants to use Dynamics 365 Supply Chain Management to manage product versions and engineering changes. Which module should they use?

Accepted Answer

Engineering Change Management. Engineering Change Management is the correct module because it is specifically designed to manage product versions, engineering changes, and the associated approval workflows in Dynamics 365 Supply Chain Management. It provides controlled revision control, bill of materials (BOM) versioning, and route versioning, enabling companies to track and implement changes from engineering through production.

Answer

Inventory management

Answer

Product information management

Answer

Procurement and sourcing

Question 15

A multinational organization uses Dynamics 365 Finance. They need to consolidate financial data from subsidiaries that use different currencies and accounting standards. The consolidation must be performed automatically on a monthly basis. What should they configure?

Accepted Answer

Consolidation and currency translation. Consolidation and currency translation in Dynamics 365 Finance is the feature that aggregates subsidiary financials into a parent entity while translating amounts from foreign currencies using defined exchange rates. It supports automated monthly runs via batch jobs and can handle differing accounting standards through account mapping. This directly matches the requirement for automatic monthly consolidation across currencies.

Answer

Fixed assets management

Answer

Intercompany accounting

Answer

Budget planning

Question 16

A company is configuring Dynamics 365 Finance for a new subsidiary. The subsidiary uses a different currency than the parent company. What must be set up to enable translation of the subsidiary's financial statements to the parent's reporting currency?

Accepted Answer

Exchange rates. To translate a subsidiary's financial statements from its local currency to the parent company's reporting currency, Dynamics 365 Finance requires exchange rates to be set up. Exchange rates define the conversion factors between currencies and are essential for currency translation, revaluation, and reporting. Without exchange rates, the system cannot perform the necessary conversions.

Answer

Currency revaluation

Answer

Consolidation company

Answer

Intercompany accounting

Question 17

Refer to the exhibit. A financial analyst needs to post an expense to the Research & Development cost center. They attempt to use the value 'R&D001' but the system does not accept it. The dimension value shown in the exhibit is the only valid value for R&D. What is the most likely reason the entry fails?

Accepted Answer

The dimension value must match 'CC001' exactly.. In Dynamics 365 Finance, financial dimension values are stored and validated by their exact value ID, not by a friendly description or name. The exhibit shows the only valid value for the R&D cost center is 'CC001', so entering 'R&D001' fails validation because it does not match any dimension value in the CostCenter dimension.

Answer

The dimension description must be entered instead of the value.

Answer

The dimension name must be included in the value.

Answer

Cost centers are not financial dimensions; they are separate.

Question 18

You are a finance manager for a multinational corporation using Dynamics 365 Finance. The company needs to comply with the new revenue recognition standard (ASC 606). They sell products and services in bundled contracts, and revenue must be allocated to performance obligations based on standalone selling prices. The system must automatically allocate the transaction price to each obligation and recognize revenue over time. Currently, the finance team manually calculates allocations in Excel. You need to configure Dynamics 365 Finance to automate revenue recognition for these bundled contracts. The company uses the Project management and accounting module for services and the Sales module for products. What should you do?

Accepted Answer

Configure the Revenue recognition module to create revenue schedules from sales orders and project proposals.. Dynamics 365 Finance includes a dedicated Revenue recognition module that can automatically create revenue schedules from sales orders (for products) and project proposals (for services). This automates the allocation of transaction prices to performance obligations based on standalone selling prices, complying with ASC 606 without manual Excel calculations.

Answer

Create separate invoices for products and services and recognize revenue manually.

Answer

Use the General ledger allocation rules to distribute revenue amounts manually.

Answer

Set up revenue recognition schedules in the Project management and accounting module only.

Question 19

A company uses the master plan configuration shown in the exhibit. What is the effect of setting IncludeDemandForecast to true?

Accepted Answer

The master plan will consider both forecasted demand and existing sales orders. When IncludeDemandForecast is set to true in the master plan configuration, the master planning engine in Dynamics 365 Supply Chain Management combines forecasted demand with existing sales orders to generate a comprehensive supply plan. This ensures that both confirmed customer orders and predicted future demand are considered, preventing under- or over-stocking.

Answer

The master plan will calculate capacity requirements based on forecast

Answer

The master plan will only consider forecasted demand and ignore sales orders

Answer

The master plan will require manual input of forecast data

Question 20

Refer to the exhibit. A production order in Dynamics 365 Supply Chain Management has Reservation set to 'Manual'. What does this mean for material availability?

Accepted Answer

Materials must be manually reserved by the user. When the Reservation field on a production order is set to 'Manual', materials are not automatically reserved or consumed. Instead, the user must explicitly reserve materials (e.g., via the production order's 'Reserve' action) before or during production. This ensures that material availability is controlled manually, preventing automatic allocation from inventory.

Answer

Materials are automatically reserved when the order is released

Answer

Materials are automatically consumed during production

Answer

Materials are reserved based on the BOM explosion date