MB-920 Practice Test 2 — 25 Questions

Question 1

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 2

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 3

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 4

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

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Vendor bidding

Answer

Procurement and sourcing

Question 5

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 6

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 7

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 8

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 9

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 10

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 11

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 12

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 13

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

Answer

Payment proposal

Answer

Automatic settlement

Question 14

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 15

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

Question 16

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 17

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 18

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 19

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 20

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