MB-920 Practice Test 22 — 15 Questions

Question 1

Which THREE capabilities are part of the core capabilities of Dynamics 365 Supply Chain Management?

Accepted Answer

Warehouse management. Warehouse management (A) is a core capability of Dynamics 365 Supply Chain Management, providing advanced functionality for managing warehouse operations including receiving, putaway, picking, packing, and shipping. It integrates with barcode scanning and RFID to optimize inventory accuracy and labor efficiency.

Answer

Payroll processing

Answer

Sales order management

Question 2

Which THREE of the following are core capabilities of Dynamics 365 Finance?

Accepted Answer

Fixed assets management. Fixed assets management is a core capability of Dynamics 365 Finance because it provides end-to-end lifecycle tracking of tangible assets—from acquisition and depreciation to disposal. The module supports multiple depreciation conventions (e.g., straight-line, declining balance) and integrates with the general ledger for automatic posting of asset transactions, ensuring accurate financial reporting and compliance with accounting standards like IFRS and GAAP.

Answer

Loyalty programs

Answer

Inventory valuation

Question 3

A manufacturing company uses Dynamics 365 Finance to manage its financial operations. The finance team notices that intercompany transactions are not being settled automatically as expected. What should you check first to resolve this issue?

Accepted Answer

Ensure the intercompany setup is correctly configured with appropriate settlement parameters.. Intercompany settlement requires a correct intercompany setup with appropriate parameters, such as settlement priority and rules. Option A is wrong because vendor posting profiles affect vendor transactions, not intercompany settlement. Option B is wrong because ledger allocation rules are for allocating amounts, not settling transactions. Option D is wrong because budget control is unrelated to intercompany settlement.

Answer

Review the vendor posting profiles.

Answer

Verify the ledger allocation rules.

Answer

Check the budget control configuration.

Question 4

Which TWO features in Dynamics 365 Supply Chain Management are used to manage product quality?

Accepted Answer

Nonconformance management. Nonconformance management (C) is correct because it is the core quality feature used to record, track, and resolve problems where products or processes fail to meet quality standards, including the associated corrections and dispositions. Quality control (quality orders) (D) is correct because quality orders define the tests, measurements, and sampling that must be performed on items, and they drive the inspection process and pass/fail decisions in Supply Chain Management. Vendor collaboration (A) is not a quality feature; it is used for sharing purchase order and vendor-related information with external suppliers. Batch balancing (B) is a warehouse/inventory process for adjusting batch quantities and reservations, not for managing quality. Inventory status (E) is used to control the availability and blocking of inventory, but it is not itself a quality management feature.

Answer

Vendor collaboration

Answer

Batch balancing

Answer

Inventory status

Question 5

An organization uses Dynamics 365 Finance for project accounting. They need to bill a customer for a fixed-price project based on a milestone schedule. Which billing method should be used?

Accepted Answer

Fixed-price milestone. In Dynamics 365 Finance project accounting, a fixed-price project billed on a milestone schedule uses the fixed-price milestone billing method. This method lets you define milestones and bill the customer a specified amount or percentage upon completion of each milestone, matching the contractual fixed-price arrangement.

Answer

Cost plus

Answer

Progress billing

Answer

Time and material

Question 6

A company wants to use Dynamics 365 Finance for advanced financial planning and analysis. Which THREE capabilities should they enable?

Accepted Answer

Budgeting. Budgeting (C) is a core capability in Dynamics 365 Finance that enables organizations to create, manage, and analyze budgets, which is essential for advanced financial planning and analysis. It integrates with general ledger and other modules to support budget control, budget planning, and budget reporting, allowing for proactive financial management.

Answer

Accounts payable

Answer

Invoice capture

Question 7

A manufacturing company uses Dynamics 365 Supply Chain Management. They need to ensure that raw materials are automatically ordered when inventory falls below a predefined level. Which feature should they configure?

Accepted Answer

Reorder point planning. Reorder point planning in Dynamics 365 Supply Chain Management automatically generates planned purchase orders when on-hand inventory drops below a defined minimum (reorder point), replenishing up to a maximum level. This directly matches the requirement to auto-order raw materials when stock falls below a threshold.

Answer

Inventory visibility

Answer

Master planning

Answer

Demand forecasting

Question 8

Which THREE components must be configured to enable a complete compensation management process in Dynamics 365 Human Resources?

Accepted Answer

Compensation levels. Compensation levels (C) are required because they define the pay hierarchy (for example, level 1 through level 5) that jobs and positions are mapped to, forming the foundation for fixed and variable pay structures. Compensation grids (D) are required because they hold the actual pay rate/amount ranges per level and are referenced by compensation plans to calculate pay. Eligibility rules (E) are required because they determine which employees qualify for a given compensation plan, such as fixed or variable plans, based on criteria like job, position, or union. Position types (A) and work calendars (B) are not part of the core compensation setup; position types relate to position administration and work calendars support time and attendance, not pay structure or eligibility.

Answer

Position types

Answer

Work calendars

Question 9

A multinational organization wants to consolidate financial data from multiple legal entities into a single reporting entity for quarterly financial statements. Which Dynamics 365 Finance feature should they use?

Accepted Answer

Consolidations. Consolidations in Dynamics 365 Finance is the dedicated feature for aggregating financial data from multiple legal entities into a single reporting entity. It supports both periodic and online consolidation processes, allowing organizations to combine trial balances, eliminate intercompany transactions, and generate consolidated financial statements for quarterly reporting.

Answer

Budgeting

Answer

Cash flow forecasting

Answer

Intercompany accounting

Question 10

A multinational company uses Dynamics 365 Finance with multiple legal entities. They want to streamline intercompany invoicing by automatically creating invoices for intercompany purchases when a purchase order is confirmed. What configuration is required?

Accepted Answer

Configure intercompany parameters to automatically post invoices on purchase order confirmation.. Intercompany parameters in Dynamics 365 Finance include settings that control whether intercompany invoices are automatically created and posted when a purchase order is confirmed. Enabling the appropriate intercompany parameter for automatic posting on PO confirmation streamlines the intercompany invoicing process across legal entities.

Answer

Use vendor invoices to manually record intercompany transactions.

Answer

Create a purchase agreement between legal entities.

Answer

Set up recurring invoices for each intercompany relationship.

Question 11

Which THREE capabilities are provided by the Production control module in Dynamics 365 Supply Chain Management?

Accepted Answer

Production order management. Option A (Production order management) is correct because the Production control module is responsible for creating, scheduling, releasing, starting, and reporting on production orders, which are the core documents that drive manufacturing execution. Option C (Bill of materials management) is correct because BOMs define the components and quantities required to produce an item, and they are maintained and consumed within Production control during production order processing. Option E (Route management) is correct because routes define the sequence of operations, work centers, and resource requirements for manufacturing an item, and they are configured and used by Production control to schedule and execute production jobs. Option B (Vendor collaboration) does not belong because vendor collaboration is handled through the Procurement and sourcing module and the Vendor collaboration workspace, not Production control. Option D (Demand forecasting) does not belong because demand forecasting is part of the Master planning module, which uses forecast data to drive planned orders rather than being a capability of Production control itself.

Answer

Vendor collaboration

Answer

Demand forecasting

Question 12

Refer to the exhibit. A data entity export shows the above record for a vendor transaction. Which Dynamics 365 Finance module is this data most likely from?

Accepted Answer

Accounts payable. The exhibit shows a vendor transaction record, which is characteristic of the Accounts payable module. Vendor transactions include invoices, payments, credit notes, and settlements tied to a vendor account, all managed within Accounts payable.

Answer

Fixed assets

Answer

General ledger

Answer

Sales tax

Question 13

A company uses Dynamics 365 Supply Chain Management and wants to reduce stockouts. Which TWO strategies should they implement?

Accepted Answer

Reorder point. Reorder point is correct because it triggers a replenishment order when inventory falls to a predefined level, directly preventing stockouts by ensuring timely restocking. Safety stock is correct because it maintains an extra buffer of inventory above expected demand to absorb variability in supply or demand, reducing the risk of stockouts during lead time fluctuations.

Answer

Vendor managed inventory

Answer

ABC classification

Answer

Cycle counting

Question 14

You are implementing Dynamics 365 Finance for a multinational company that must comply with local tax regulations in multiple countries. The company plans to use electronic invoicing for all customer invoices. The finance team needs to configure tax codes, tax groups, and item tax groups to ensure correct tax calculation. Additionally, the company wants to use tax reporting codes to generate tax returns automatically. You need to design the tax setup. What should you do?

Accepted Answer

Create tax codes, tax groups, and item tax groups. Assign tax groups to customers and item tax groups to items. Configure tax reporting codes for tax authorities.. Tax codes define rates and rules, tax groups combine taxes for different jurisdictions, item tax groups define item-level tax, and tax reporting codes map to tax return boxes. Option A is wrong because it misses item tax groups. Option B is wrong because tax groups are not for item-level. Option C is wrong because tax reporting codes are needed for returns.

Answer

Create tax codes and tax groups. Assign tax groups to customers and set up item sales tax groups on items. Tax reporting codes are optional.

Answer

Create tax codes, then assign tax codes directly to customers and items. Use tax reporting codes for returns.

Answer

Create tax codes and tax groups. Assign tax groups to customers and item tax groups to items. Tax reporting codes are not required.

Question 15

A company uses Dynamics 365 Supply Chain Management and wants to implement a process where suppliers can monitor inventory levels and automatically replenish stock. Which feature should they enable?

Accepted Answer

Vendor-managed inventory (VMI). Vendor-managed inventory (VMI) is the correct feature because it directly enables suppliers to monitor inventory levels and automatically replenish stock. In Dynamics 365 Supply Chain Management, VMI allows the vendor to access inventory data and create replenishment orders based on agreed thresholds, shifting inventory management responsibility to the supplier. This matches the requirement of suppliers monitoring and replenishing stock automatically.

Answer

Consignment inventory

Answer

Purchase requisition

Answer

Blanket purchase orders