MB-920 Practice Test 3 — 25 Questions

Question 1

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?

Choose an answer to begin — your selection is scored in the full session.

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.

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Budgeting

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Cash flow forecasting

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Intercompany accounting

Question 2

A company uses Dynamics 365 Supply Chain Management. They need to track a batch of raw material from receipt to finished goods shipment for quality compliance. Which supply chain process should they use?

Accepted Answer

Batch tracking. Batch tracking in Dynamics 365 Supply Chain Management enables the assignment of unique batch numbers to raw materials and finished goods, allowing the system to trace the material from receipt through production to shipment. This process is essential for quality compliance, as it supports recall management, expiry date monitoring, and detailed genealogy reports that track the entire lifecycle of a batch.

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Transfer orders

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Consignment inventory

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Inventory counting

Question 3

A company uses Dynamics 365 Human Resources. They want to automate the process of assigning training courses to employees based on their job role and completion of prerequisite courses. Which feature should they use?

Accepted Answer

Training management. Training management in Dynamics 365 Human Resources is the correct feature because it is specifically designed to handle course assignments, prerequisites, and automated training workflows based on job roles. This module allows administrators to define training plans, link them to job positions, and enforce prerequisite completion before enrolling employees, directly meeting the stated requirement.

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Compensation management

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Performance management

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Recruitment management

Question 4

A manufacturing company uses Dynamics 365 Finance to manage its inventory. The company wants to ensure that the cost of raw materials is updated automatically when purchase orders are invoiced. Which costing method should the company use?

Accepted Answer

Moving average. Standard costing updates costs based on predetermined standards, not automatically from purchase invoices. Weighted average and moving average can update on invoice posting. FIFO tracks actual cost layers. Moving average is commonly used for real-time cost updates.

Answer

FIFO

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Standard costing

Answer

Weighted average

Question 5

Refer to the exhibit. The JSON shows the configuration for a currency exchange rate in Dynamics 365 Finance. A user reports that when posting a sales invoice in EUR, the system does not automatically convert to USD using the rate shown. What is the most likely reason?

Accepted Answer

The ExchangeRateType is set to Average, which is not used for automatic conversion. The exchange rate type 'Average' is designed for reporting and is not used for automatic conversion during document posting. Dynamics 365 Finance requires a rate type such as 'Spot' or 'Daily' to trigger automatic currency conversion. Option B is incorrect because the CurrencyCode is set correctly to USD (the target currency). Option C is incorrect; a future date does not prevent the rate from being used—it would simply apply when that date becomes current. Option D is incorrect; tolerance settings control rate variance checks, not whether a rate is applied at all.

Answer

The CurrencyCode is set to USD instead of EUR

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The ExchangeRateDate is in the future

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The ExchangeRate is not within the allowed tolerance

Question 6

Refer to the exhibit. A company has configured budget control as shown. A user attempts to create a purchase order for $12,000. The system currently issues a warning but allows the transaction to proceed. The company wants to prevent any transaction exceeding the threshold from being posted. What should the budget controller change in the configuration?

Accepted Answer

Change the ActionOnExceed to Block.. Changing the ActionOnExceed to 'Block' will prevent any transaction exceeding the threshold from being posted. Currently, the action is set to 'Warn', which allows the transaction to proceed with a warning. Option A is incorrect because removing VendorInvoice from the Documents list would disable budget control for that document type, not change the behavior on exceed. Option B is incorrect because changing the BudgetModel to Revised Budget would affect which budget amounts are used for comparison, but not the action when exceeded. Option C is incorrect because changing the BudgetThreshold to $12,000 would match the exact amount, but the system would still issue a warning for amounts exceeding that threshold unless the action is changed to Block.

Answer

Remove VendorInvoice from the Documents list.

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Change the BudgetModel to Revised Budget.

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Change the BudgetThreshold to 12000.

Question 7

Which THREE of the following are valid warehouse management processes in Dynamics 365 Supply Chain Management?

Accepted Answer

Shipping. Options A, C, and D are correct: Receiving, Picking, and Shipping are core warehouse processes. Option B is incorrect because Budgeting is a financial process, not a warehouse management process. Option E is incorrect because Invoicing is part of Accounts receivable, which is also a financial process.

Answer

Budgeting

Answer

Invoicing

Question 8

A company is configuring fixed assets in Dynamics 365 Finance. They need to ensure that asset depreciation is calculated differently for tax reporting and financial reporting. Which TWO actions must be taken?

Accepted Answer

Create multiple value models for the same asset.. In Dynamics 365 Finance, to calculate depreciation differently for tax and financial reporting, you must create multiple value models for the same asset. Each value model can then be assigned a separate depreciation profile, allowing distinct depreciation calculations for each reporting purpose.

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Use a single depreciation book for both tax and financial.

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Enable the 'Derived value models' feature.

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Use a single value model with multiple depreciation profiles.

Question 9

A manufacturing company uses Dynamics 365 Supply Chain Management. They want to use AI to forecast demand for raw materials based on historical sales and external factors like weather. Which feature should they enable?

Accepted Answer

Enable Demand Forecasting with Azure Machine Learning integration.. The scenario explicitly requires AI-driven demand forecasting that incorporates external factors like weather. Dynamics 365 Supply Chain Management's Demand Forecasting feature integrates with Azure Machine Learning to apply advanced algorithms that analyze historical sales data alongside external variables, producing more accurate predictions than traditional methods.

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Use the Forecasting setup in Master planning to generate baseline forecasts.

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Configure Material Requirements Planning (MRP) to run nightly.

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Implement Inventory Forecasting with Power BI dashboards.

Question 10

A company uses Dynamics 365 Finance to manage intercompany transactions. They need to automate the elimination of intercompany sales and purchases during consolidation. What feature should they configure?

Accepted Answer

Intercompany elimination rules. Intercompany elimination rules in Dynamics 365 Finance are specifically designed to automate the removal of intercompany sales and purchase transactions during the consolidation process. These rules define matching criteria (e.g., intercompany trade agreements, dimensions) and generate elimination entries that offset the intercompany revenue and expense, ensuring the consolidated financial statements reflect only external transactions.

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Fixed asset management

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Budget control

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Vendor collaboration

Question 11

A company uses Dynamics 365 Finance and Operations. They need to configure financial dimensions for reporting. Which TWO statements about financial dimensions are correct?

Accepted Answer

Financial dimensions can be used to segment financial data for reporting.. Financial dimensions in Dynamics 365 Finance and Operations are specifically designed to segment financial data, such as splitting revenue by region or product line, enabling granular reporting and analysis. This segmentation allows organizations to create detailed financial statements and pivot on dimensions like cost center or department for deeper insights.

Answer

Financial dimensions cannot be used in budget control.

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Financial dimensions are only applicable to the main account.

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Financial dimensions can only be used in one account structure at a time.

Question 12

A company uses Dynamics 365 Project Operations. They need to track project costs and revenue recognition in real time. Which module should they use?

Accepted Answer

Project Operations. Dynamics 365 Project Operations is the dedicated module for managing the entire project lifecycle, including cost tracking and revenue recognition in real time. It integrates project planning, resource management, and financials to ensure that project costs and revenue are recognized accurately as work progresses, without needing to switch to separate modules.

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Finance

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Commerce

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Supply Chain Management

Question 13

A company uses Dynamics 365 Supply Chain Management. They need to ensure that a specific item is always sourced from a preferred vendor, even if another vendor has a lower price. Which configuration should be used?

Accepted Answer

Purchase trade agreements. Purchase trade agreements allow you to define specific sourcing rules for items, including a preferred vendor relationship. This ensures that a particular item is always sourced from the designated vendor regardless of price. Option A (Vendor allocation rules) is used to distribute purchase quantities among multiple vendors, not to force a single preferred vendor. Option B (Product dimension groups) define product variants, not sourcing preferences. Option C (Inventory status codes) control inventory availability and transaction types, not vendor selection.

Answer

Vendor allocation rules

Answer

Product dimension groups

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Inventory status codes

Question 14

A project manager is configuring Dynamics 365 Project Operations for a company that uses Microsoft Project for detailed scheduling. The company wants to import the WBS from Microsoft Project into Dynamics 365 Project Operations. Which tool or feature should be used?

Accepted Answer

Project for the Web integration. Project for the Web integration is the correct tool because it provides native synchronization between Microsoft Project and Dynamics 365 Project Operations, allowing the Work Breakdown Structure (WBS) to be imported directly without custom development. This integration leverages the Common Data Service (CDS) to map project tasks, dependencies, and resources seamlessly.

Answer

Data import wizard

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Power Automate flow

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Excel add-in

Question 15

A distribution company uses Dynamics 365 Supply Chain Management to manage its warehouse operations. The warehouse manager reports that during peak hours, order picking is slow because pickers frequently travel long distances to retrieve items. The warehouse layout is fixed. Which feature should the company use to optimize picking routes without changing the physical layout?

Accepted Answer

Configure wave processing with location-based wave filters.. Wave processing with location-based wave filters allows the system to group work into waves based on criteria such as location, enabling the creation of efficient picking routes that minimize travel distance. This feature optimizes the sequence of picks within a wave without requiring any physical changes to the warehouse layout, directly addressing the manager's need to reduce travel time during peak hours.

Answer

Enable replenishment to ensure pick locations are fully stocked.

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Use location directives to direct putaway to random locations.

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Implement cluster picking to group orders by customer.

Question 16

A retail company uses Dynamics 365 Commerce integrated with Finance and Operations. They want to synchronize real-time inventory data between the online store and the back office. Which capability should they enable?

Accepted Answer

Retail Server and Channel Data Distribution. Retail Server and Channel Data Distribution is the Dynamics 365 Commerce component designed to synchronize real-time inventory data between the online store and the back office. It uses a push-based mechanism to distribute master data and transactional data from the headquarters to channel databases, ensuring that inventory levels are updated promptly for e-commerce operations.

Answer

Commerce Data Exchange: Async Service

Answer

Commerce Data Exchange: Synch Service

Answer

Commerce Data Exchange: Real-time Service

Question 17

A company uses Dynamics 365 Finance. They need to automate expense report processing. Which TWO capabilities are available in Expense management?

Accepted Answer

Credit card transaction import. Credit card transaction import (Option B) is a core capability of Expense management in Dynamics 365 Finance, allowing employees to automatically import corporate credit card charges into expense reports, reducing manual entry. AI-powered receipt matching (Option D) uses machine learning to match receipt images to expense line items, streamlining approval and audit processes.

Answer

Integration with payroll for automatic deductions

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Direct submission to general ledger

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Automatic payment to employees

Question 18

A company uses Dynamics 365 Finance and wants to enable AI-driven insights to detect anomalies in financial transactions. Which Copilot feature should be used?

Accepted Answer

Enable the AI anomaly detection in the Finance insights module.. The AI anomaly detection feature in the Finance insights module uses machine learning to identify unusual financial transactions. Option A is incorrect because 'Activate Copilot for Finance insights to generate reports' focuses on report generation, not anomaly detection. Option B is irrelevant as Copilot for Sales is designed for sales processes, not financial anomaly detection. Option D is also incorrect as Copilot for Service is for customer service scenarios, not financial transactions.

Answer

Activate Copilot for Finance insights to generate reports.

Answer

Use Copilot for Sales to analyze transaction data.

Answer

Configure Copilot for Service to review financial transactions.

Question 19

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.

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Field service

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Project management

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Warehouse management

Question 20

A company implements Dynamics 365 Finance and needs to configure a chart of accounts that supports multiple legal entities. What is the best practice for managing shared accounts?

Accepted Answer

Use the shared chart of accounts feature and assign it to each legal entity.. The shared chart of accounts feature in Dynamics 365 Finance allows a single chart of accounts to be used across multiple legal entities, ensuring consistency and simplifying maintenance. Option A is incorrect because deleting unused accounts is irrelevant to sharing. Option C is incorrect because financial dimensions are used for tracking, not for sharing the chart of accounts. Option D is incorrect because separate charts per entity increase complexity and are not a best practice.

Answer

Delete accounts that are not used across all entities.

Answer

Use financial dimensions to differentiate accounts by legal entity.

Answer

Create a separate chart of accounts for each legal entity to ensure independence.