MB-920 Practice Test 22 — 15 Questions

Question 1

A retail company wants to automate the reconciliation of bank statements with ledger entries in Dynamics 365 Finance. Which feature should they use?

Accepted Answer

Advanced bank reconciliation. Advanced bank reconciliation allows automatic matching of bank statement lines with bank transactions in the system. Option A is wrong because cash flow forecasting predicts future cash flows, not reconciliation. Option C is wrong because the payment journal is used to record payments, not reconciliation. Option D is wrong because the general journal is used for manual journal entries, not reconciliation.

Answer

Cash flow forecasting

Answer

Payment journal

Answer

General journal

Question 2

A company uses Dynamics 365 Finance and has a requirement to automatically generate vendor payments based on due dates and available cash. They want to schedule payments for multiple vendors at once. Which feature should they use?

Accepted Answer

Payment proposal. The Payment proposal feature in Accounts payable allows automatic generation of vendor payments based on criteria such as due dates and available cash. Option A (Check management) is used for managing check payments, not for automatic payment generation. Option B (Manual payment journal) requires manual entry for each payment. Option D (Vendor payment schedule) is a field on purchase orders, not a feature for automatic payment generation.

Answer

Check management

Answer

Manual payment journal

Answer

Vendor payment schedule

Question 3

Your organization uses Dynamics 365 Finance. The controller wants to allow users to enter journal entries but prevent them from posting journals that are out of balance. What should you configure?

Accepted Answer

Journal names setup. Journal names setup allows configuration of parameters including the requirement that journals must be balanced before posting. Therefore, Option B is correct. Option A (Journal approval workflow) handles approval processes, not balance enforcement. Option C (Financial period close) manages period closing activities. Option D (User role permissions) controls user access but does not enforce balance checks.

Answer

Journal approval workflow

Answer

Financial period close

Answer

User role permissions

Question 4

A multinational corporation uses Dynamics 365 Finance to manage its financial consolidation across multiple subsidiaries with different currencies. The consolidation must adhere to local GAAP and IFRS. The finance team needs to perform consolidation with elimination of intercompany transactions automatically. What is the most efficient way to achieve this?

Accepted Answer

Set up a consolidation company and use elimination rules. The most efficient way to achieve automated consolidation with intercompany elimination in Dynamics 365 Finance is to set up a consolidation company and define elimination rules. This automates the elimination of intercompany transactions during the consolidation process. Option A (manual elimination) is inefficient and error-prone. Option C (Budget control) is unrelated to consolidation. Option D (Financial reporting with a reporting tree) handles currency translation and reporting, not the actual consolidation process.

Answer

Use the General ledger consolidation process and manually eliminate intercompany transactions

Answer

Use the Budget control module to track intercompany balances

Answer

Configure financial reporting with a reporting tree and currency translation

Question 5

A company using Dynamics 365 Finance needs to allocate overhead costs to different departments based on square footage. What should they set up?

Accepted Answer

Allocation rules in General ledger. Correct: Allocation rules in General ledger allow distribution of overhead costs based on defined criteria like square footage. Option A is wrong because Budget transfer is for moving budget amounts, not overhead allocation. Option B is wrong because Cost accounting focuses on internal cost analysis, not direct allocation rules. Option D is wrong because Fixed asset depreciation deals with asset value reduction, not cost allocation.

Answer

Budget transfer

Answer

Cost accounting

Answer

Fixed asset depreciation

Question 6

Which TWO of the following are valid modules in Dynamics 365 Finance? (Select two.)

Accepted Answer

Accounts payable. Accounts payable and Budgeting are both core functional modules within Dynamics 365 Finance. Accounts payable handles vendor invoices and payments, while Budgeting enables financial planning and control. Customer relationship management (Option B) is a separate Dynamics 365 application (Sales), not a module within Finance. Project management (Option D) is also a separate application (Project Operations), not part of Finance. Power Apps (Option E) is a low-code platform for building custom apps, not a Finance module.

Answer

Customer relationship management

Answer

Project management

Answer

Power Apps

Question 7

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. Correct: The VendTrans table is from Accounts payable, making D the correct answer. Option A is wrong because Fixed assets uses AssetTrans. Option B is wrong because General ledger uses LedgerTrans. Option C is wrong because Sales tax uses TaxTrans.

Answer

Fixed assets

Answer

General ledger

Answer

Sales tax

Question 8

A company needs to comply with a new regulation requiring that all journal entries be approved by a supervisor before posting. The company uses Dynamics 365 Finance. What should they configure?

Accepted Answer

Create a journal approval workflow. Correct: Create a journal approval workflow. Option A is wrong because Financial dimension sets are for reporting, not for approval. Option B is wrong because General ledger parameters include various settings but not journal approval workflows. Option D is wrong because Audit trail settings track changes but do not enforce approvals.

Answer

Configure financial dimension sets

Answer

Modify general ledger parameters

Answer

Enable audit trail settings

Question 9

Refer to the exhibit. A Dynamics 365 Finance administrator imports the above exchange rate. For what purpose would an 'Average' exchange rate type be used?

Accepted Answer

To revalue balance sheet accounts at period end. Correct: Average rates are used for revaluation of balance sheet accounts. Option A is wrong because budget conversions use budget rates. Option B is wrong because transaction entry uses spot rates. Option D is wrong because sales invoicing uses spot rates.

Answer

To convert budget amounts

Answer

To convert foreign currency transactions at the time of entry

Answer

To calculate sales invoice amounts in company currency

Question 10

A manufacturing company uses Dynamics 365 Finance. The finance team needs to automate the calculation of monthly depreciation for fixed assets that are acquired mid-month. Which depreciation method should be configured to ensure proportional depreciation is applied based on the number of days the asset was in service during the first month?

Accepted Answer

Straight line service life. Half year convention starts depreciation at the midpoint of the year, not proportional per day. Declining balance is an accelerated method but does not handle mid-month acquisition proportionally. Straight line service life with prorated first month is the correct method to calculate depreciation based on the exact days the asset was in service. Reducing balance is similar to declining balance. Option C is correct.

Answer

Reducing balance

Answer

Declining balance

Answer

Half year convention

Question 11

Which TWO are key features of Dynamics 365 Finance?

Accepted Answer

Financial reporting. Correct: Financial reporting and Budgeting are core features of Dynamics 365 Finance. Option A is wrong because Human resources is a separate module handled by Dynamics 365 Human Resources, not by Finance. Option B is wrong because Inventory management is part of Dynamics 365 Supply Chain Management. Option C is wrong because Customer relationship management is in Dynamics 365 Sales. Options D and E are correct as they are fundamental financial management features.

Answer

Human resources

Answer

Inventory management

Answer

Customer relationship management

Question 12

A company uses Dynamics 365 Finance and is planning to use AI capabilities to improve financial forecasting. Which THREE features are available in Dynamics 365 Finance for AI-driven forecasting?

Accepted Answer

Budget proposal from historical data.. Options A, B, and C are correct. Budget proposal from historical data, cash flow forecasting, and customer payment predictions are AI-driven features in Dynamics 365 Finance. Option D (Financial reporting) is not AI-driven; it is a standard reporting capability. Option E (Vendor collaboration workspace) is a portal for vendor interactions, not an AI feature.

Answer

Financial reporting.

Answer

Vendor collaboration workspace.

Question 13

A company uses Dynamics 365 Finance and needs to ensure that purchase order invoices are automatically matched to the original purchase order and receipt quantities before payment. Which configuration is required?

Accepted Answer

Enable invoice matching validation. Invoice matching validation enforces three-way matching between the purchase order, receipt, and invoice, ensuring quantities and amounts align before payment. Option A (vendor payment journal) is for recording payments, not matching. Option B (purchase agreement) is for long-term contracts and pricing. Option C (payment schedule) is for installment payment terms. Only Option D enables the necessary validation.

Answer

Create a vendor payment journal

Answer

Configure a purchase agreement

Answer

Set up a payment schedule

Question 14

A company wants to use Dynamics 365 Finance to manage its cash flow by forecasting future bank balances. Which module should they use?

Accepted Answer

Cash and bank management. Cash and bank management includes cash flow forecasting tools. Option B (Accounts receivable) manages customer payments, not forecasting. Option C (Accounts payable) manages vendor payments, not forecasting. Option D (General ledger) is for posting, not forecasting.

Answer

Accounts receivable

Answer

Accounts payable

Answer

General ledger

Question 15

Your organization uses Dynamics 365 Finance and needs to track expenses by project for a construction project. Which module and configuration should you use?

Accepted Answer

Project management and accounting module with cost categories and budgets.. The Project management and accounting module is designed for project cost tracking and budgeting. It supports cost categories and budgets per project, which is ideal for construction projects. Option A is incorrect because the Fixed assets module is for tracking fixed assets, not project expenses. Option B is incorrect because the Budgeting module is for general financial budgets, not project-specific cost tracking. Option D is incorrect because the Expense management module is for employee expense reports, not project cost tracking.

Answer

Fixed assets module with asset tracking.

Answer

Budgeting module with budget control.

Answer

Expense management module with expense categories.