MB-920 Practice Test 21 — 15 Questions

Question 1

A company needs to generate financial statements in Dynamics 365 Finance that comply with local regulatory requirements. Which tool should be used to design custom financial reports?

Accepted Answer

Financial reporting (Management Reporter).. Management Reporter (now part of Financial reporting) is the tool for custom financial reports. Option A is wrong because Excel integration via OData is for ad-hoc analysis, not report design. Option B is wrong because Power BI dashboards are for analytics, not custom report design. Option C is wrong because the General ledger inquiry shows data, not reports.

Answer

Excel integration via OData.

Answer

Power BI dashboards.

Answer

General ledger inquiry.

Question 2

A retail company using Dynamics 365 Finance notices that inventory valuations are incorrect due to varying purchase prices. Which costing method will provide the most accurate valuation by averaging costs over a period?

Accepted Answer

Weighted average. Weighted average costing calculates an average cost over a period, smoothing out price fluctuations. Option B is wrong because standard cost uses predetermined costs, not actual costs. Option C is wrong because FIFO assigns the oldest cost to sales. Option D is wrong because moving average recalculates after each transaction, not over a period.

Answer

Standard cost

Answer

FIFO

Answer

Moving average

Question 3

A company uses Dynamics 365 Finance to manage its accounts payable. The AP clerk receives an invoice that does not have a purchase order. Which document type should the clerk use to record the invoice?

Accepted Answer

Vendor invoice journal. Purchase order invoice requires a PO. Vendor invoice journal is for invoices without PO. Invoice pool is for hold. Vendor invoice workspace is a landing page.

Answer

Purchase order invoice

Answer

Vendor invoice workspace

Answer

Invoice pool

Question 4

Refer to the exhibit. The exhibit shows the main account balance and transactions for a checking account. What is the balance after all transactions are posted?

Accepted Answer

35000. Starting balance is 50000. A debit of 10000 increases the balance to 60000. A credit of 5000 decreases it to 55000. Another credit of 20000 decreases it to 35000. Option A (30000) is incorrect because it miscalculates the net effect. Option C (40000) is incorrect because it might ignore one of the credits. Option D (45000) is incorrect because it incorrectly adds the credits instead of subtracting.

Answer

30000

Answer

40000

Answer

45000

Question 5

Which THREE components are essential for setting up intercompany accounting in Dynamics 365 Finance? (Choose three.)

Accepted Answer

Intercompany relationships.. Options B, D, and E are correct. Intercompany relationships define the legal entities involved, intercompany journals handle transactions between those entities, and intercompany settlement ensures that balances are settled properly. Option A (budget control rules) is not essential for intercompany accounting; it is an optional feature for budget management. Option C (vendor groups) is used for vendor categorization but is not specific to intercompany setup.

Answer

Budget control rules.

Answer

Vendor groups.

Question 6

A retail company uses Dynamics 365 Finance to manage its fixed assets. They purchase a new delivery truck. Which fixed asset transaction type should they use to record the purchase?

Accepted Answer

Acquisition. Acquisition records the purchase of a fixed asset. Option B is wrong because impairment records a permanent decline in value. Option C is wrong because disposal records the sale or retirement. Option D is wrong because depreciation records the value decrease over time.

Answer

Impairment

Answer

Disposal

Answer

Depreciation

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. Department and Project are both financial dimensions in Dynamics 365 Finance, enabling expense tracking by department and project. Option B is wrong because Vendor is a party type, not a financial dimension. Option C is wrong because Item is a product dimension, not suitable for tracking expenses by department and project. Option D is wrong because Location is a dimension but is not typically used for expense tracking in this context; Cost center alone would be more appropriate.

Answer

Department and Vendor

Answer

Item and Project

Answer

Location and Cost center

Question 8

A company uses Dynamics 365 Finance to manage its fixed assets. They have purchased a new piece of machinery and want to record it in the system. Which module should they use to create the fixed asset record?

Accepted Answer

Fixed assets. The Fixed assets module is used to manage asset records, depreciation, and disposal. Option A (Budgeting) handles budgets, not fixed assets. Option B (Inventory management) manages stock items, not fixed assets. Option D (General ledger) is for financial transactions and accounts, not asset records.

Answer

Budgeting

Answer

Inventory management

Answer

General ledger

Question 9

A company uses Dynamics 365 Finance to manage intercompany transactions. Which THREE steps are required to set up intercompany accounting?

Accepted Answer

Define intercompany partners. You must define intercompany partners, set up elimination rules, and configure intercompany accounting sequences. Creating a consolidation company is a separate process. Setting up budget models is unrelated.

Answer

Create a consolidation company

Answer

Set up budget models

Question 10

A company uses Dynamics 365 Finance with multiple legal entities. They need to view consolidated financial data across all entities without manual intervention. What should they configure?

Accepted Answer

Consolidation. Consolidation in Dynamics 365 Finance automatically aggregates financial data from multiple legal entities. Option A is wrong because currency revaluation adjusts exchange rates, not consolidate data. Option C is wrong because financial dimension sets are used for reporting and analysis hierarchies, not for consolidating data across entities. Option D is wrong because elimination rules remove intercompany transactions during consolidation, but they do not perform the consolidation itself.

Answer

Currency revaluation

Answer

Financial dimension sets

Answer

Elimination rules

Question 11

Which TWO features in Dynamics 365 Finance help organizations comply with international accounting standards such as IFRS? (Select TWO.)

Accepted Answer

Multiple posting layers. Multiple posting layers allow organizations to maintain parallel accounting standards for compliance with IFRS and other international accounting standards. Option D is correct because dual currency support enables financial reporting in multiple currencies, which is essential for IFRS compliance. Option B (Vendor payment proposal) is incorrect as it relates to accounts payable, not compliance. Option C (Budget control) is incorrect as it is an internal budgeting tool. Option E (Fixed asset management) is incorrect as it pertains to asset lifecycle management, not specific compliance features.

Answer

Vendor payment proposal

Answer

Budget control

Answer

Fixed asset management

Question 12

Which THREE are valid financial dimensions in Dynamics 365 Finance?

Accepted Answer

Cost center. Department, Cost center, and Project are standard financial dimensions in Dynamics 365 Finance. Vendor is not a financial dimension; it is a default dimension used in transactions. Location is not a financial dimension; it is part of operating units or inventory dimensions. Therefore, the correct three options are B (Cost center), D (Project), and E (Department).

Answer

Vendor

Answer

Location

Question 13

A retail company uses Dynamics 365 Finance and wants to implement Copilot (AI-powered assistant) to help the finance team analyze financial data and generate insights. Which feature in Dynamics 365 Finance provides Copilot capabilities?

Accepted Answer

Copilot in finance and operations. Copilot in finance and operations provides AI-powered analysis and insights. Option A is a general concept, Option B is for reporting, Option D is for analytics, but Copilot is the specific feature.

Answer

Power BI embedded

Answer

Financial reporting

Answer

AI Builder

Question 14

A manufacturing company uses Dynamics 365 Finance. The finance team notices that the actual budget expenditures for the current fiscal year are significantly higher than planned. They need to identify variances and adjust the budget accordingly. Which feature should they use to analyze the budget vs. actuals and make adjustments?

Accepted Answer

Budget control configuration. Budget control configuration allows monitoring of budget funds and analysis of budget vs. actuals. Option A (Budget planning) is for creating budgets, not analyzing variances. Option B (Budget register entries) is for recording budget amounts, not analysis. Option C (Fixed asset management) is unrelated to budget analysis. Therefore, D is correct.

Answer

Budget planning

Answer

Budget register entries

Answer

Fixed asset management

Question 15

Which THREE actions can be performed in the General ledger module of Dynamics 365 Finance? (Select three.)

Accepted Answer

Perform currency revaluation. Posting journal entries, managing the chart of accounts, and performing currency revaluation are all tasks performed in the General ledger module of Dynamics 365 Finance. Option A (Configure sales tax codes) is a task in the Tax module, and Option C (Process vendor invoices) is a task in the Accounts payable module, so they are not correct.

Answer

Configure sales tax codes

Answer

Process vendor invoices