MB-920 Practice Test 5 — 25 Questions

Question 1

A company uses Dynamics 365 Finance and needs to enforce that purchase orders over $10,000 require approval from the finance manager. What is the most efficient way to configure this?

Accepted Answer

Create a purchase order approval workflow with a condition on amount.. Workflows in Dynamics 365 Finance allow you to create approval processes based on conditions like amount. Option A is wrong because budget control limits spending but doesn't enforce approval workflow. Option B is wrong because manually notifying approvers is not efficient or automated. Option D is wrong because vendor invoice policies are for invoices, not purchase orders.

Answer

Configure budget control to restrict spending.

Answer

Manually notify the finance manager for high-value POs.

Answer

Set up a vendor invoice policy.

Question 2

A company using Dynamics 365 Finance needs to ensure that purchase requisitions over $10,000 are reviewed by a manager before becoming purchase orders. Which feature should they use?

Accepted Answer

Workflow. Workflow. In Dynamics 365 Finance, the workflow feature allows organizations to define automated approval processes based on rules, such as purchase requisitions exceeding a threshold (e.g., $10,000) requiring manager review before becoming purchase orders. Option A (Purchase agreements) is incorrect because purchase agreements are contracts with vendors specifying terms for purchases, not approval processes. Option C (Procurement catalogs) is incorrect because procurement catalogs manage the list of approved products and services for procurement, not approval workflows. Option D (Budget control) is incorrect because budget control ensures that expenditures do not exceed available budget, but it does not handle approval routing based on requisition amounts.

Answer

Purchase agreements

Answer

Procurement catalogs

Answer

Budget control

Question 3

A company uses Dynamics 365 Finance and needs to automate the process of converting purchase requisitions into purchase orders. Which feature should be used?

Accepted Answer

Configure a purchase requisition workflow that automatically generates a purchase order when the requisition is approved.. A purchase requisition workflow can be configured to automatically generate a purchase order when the requisition is approved. Option A is incorrect because a procurement catalog defines approved items but does not automate PO creation. Option B is incorrect because vendor collaboration enables external communication, not PO creation from requisitions. Option D is incorrect because the Request for quotation (RFQ) process is for competitive bidding, not automatic PO generation from approved requisitions.

Answer

Set up a procurement catalog to define items that can be ordered.

Answer

Enable vendor collaboration to allow vendors to create purchase orders.

Answer

Use the Request for quotation (RFQ) process to select a vendor and create a purchase order.

Question 4

Which TWO of the following are required to set up a consolidation in Dynamics 365 Finance? (Select two.)

Accepted Answer

A consolidation company. A consolidation company serves as the legal entity for the consolidated data. Currency conversion rates are required to translate amounts from source companies to the consolidation company's currency. Reporting trees are optional for structuring drill-down, elimination rules are optional for automating intercompany eliminations, and budget plan templates are unrelated to consolidation setup.

Answer

Reporting tree

Answer

Elimination rules

Answer

Budget plan templates

Question 5

A service company uses Dynamics 365 Finance to manage fixed assets. They recently acquired a building and want to split the cost between land (non-depreciable) and building (depreciable). How should they set this up?

Accepted Answer

Create two fixed asset records: one for land with non-depreciable profile, and one for building with depreciable profile. To properly account for the building acquisition, two separate fixed asset records should be created: one for the land with a non-depreciable profile, and one for the building with a depreciable profile. This allows the system to handle the different depreciation treatments correctly. Option A is incorrect because a single record cannot have a non-depreciable portion; manual adjustment would be error-prone. Option C is incorrect because there is no 'Component Depreciation' feature for splitting cost in this way. Option D is incorrect because sub-assets are typically used for components that are also depreciable, not for non-depreciable land.

Answer

Create one fixed asset record for the total cost and manually adjust depreciation

Answer

Use the 'Component Depreciation' feature to split the asset

Answer

Create a parent asset for the building and a sub-asset for the land

Question 6

Your organization needs to track inventory costs using a perpetual inventory system with weighted average costing method. The finance team wants to ensure that inventory transactions are posted to the general ledger automatically. Which parameter must be configured in Dynamics 365 Finance?

Accepted Answer

Post inventory in ledger parameter. The 'Post inventory in ledger' parameter in Dynamics 365 Finance enables automatic posting of inventory transactions to the general ledger when using a perpetual inventory system. Option A (Warehouse management parameters) controls warehouse processes, not general ledger posting. Option B (Inventory model group) defines the costing method and inventory model but does not control automatic posting. Option C (Item model group) is synonymous with inventory model group and thus also not for posting. Only Option D correctly enables the required automatic ledger posting.

Answer

Warehouse management parameters

Answer

Inventory model group

Answer

Item model group

Question 7

A company uses Dynamics 365 Finance and needs 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 provides customizable, regulatory-compliant financial statements. Option A (Electronic reporting) is used for configuring electronic documents and tax reports, not specifically for financial statements. Option B (Financial reporting) is the correct feature for generating financial statements. Option C (Intercompany accounting) handles transactions between legal entities, not reporting. Option D (Budget control) manages budget allocations and monitoring, not financial statement generation.

Answer

Electronic reporting

Answer

Intercompany accounting

Answer

Budget control

Question 8

Which TWO features are part of Dynamics 365 Finance for managing accounts payable?

Accepted Answer

Vendor invoice automation. Vendor invoice automation and payment proposals are key accounts payable features. Billing schedules and collection letters are for accounts receivable. Fixed asset depreciation is for fixed assets.

Answer

Billing schedules

Answer

Fixed asset depreciation

Answer

Collection letters

Question 9

Which THREE components are part of the Dynamics 365 Finance General ledger module?

Accepted Answer

Main accounts. Options B, C, and D are correct because Main accounts are fundamental to the General ledger, Ledger calendar defines fiscal periods for the general ledger, and Chart of accounts structures the account framework. Option A is incorrect because Inventory posting profiles are part of Inventory management, not the General ledger. Option E is incorrect because Payment schedules are used in Accounts payable and Accounts receivable, not the General ledger.

Answer

Inventory posting profiles

Answer

Payment schedule

Question 10

A company is implementing Dynamics 365 Finance and needs to configure the chart of accounts. Which TWO statements are true about the chart of accounts?

Accepted Answer

The chart of accounts can be shared across multiple legal entities.. Options A and E are correct. The chart of accounts can be shared across multiple legal entities (A) and it defines the list of main accounts used in the general ledger (E). Option B is incorrect because account structures, not the chart of accounts itself, define valid dimension combinations. Option C is incorrect because main accounts with posted transactions cannot be deleted. Option D is incorrect because the chart of accounts does not have to be unique per legal entity; it can be shared.

Answer

The chart of accounts includes account structures that define valid dimension combinations.

Answer

Main accounts can be deleted even if they have posted transactions.

Answer

The chart of accounts must be unique for each legal entity.

Question 11

A company needs to track the purchase order commitment against the budget in Dynamics 365 Finance. Which feature should they use?

Accepted Answer

Budget control. Budget control is the feature in Dynamics 365 Finance that tracks commitments (such as purchase orders) and actual expenditures against the budget. Option B is correct. Option A is incorrect because a recurring journal is used for recurring transactions, not for tracking budget commitments. Option C is incorrect because transaction posting definitions define posting rules but are not related to budget tracking. Option D is incorrect because encumbrance accounting is a part of budget control that specifically tracks commitments; however, the general feature that encompasses this tracking is budget control.

Answer

Recurring journal

Answer

Transaction posting definitions

Answer

Encumbrance accounting

Question 12

A company wants to use Dynamics 365 Finance to manage its cash flow. Which feature allows them to forecast future cash positions based on historical data and expected payments?

Accepted Answer

Cash flow forecasting. The cash flow forecasting feature in Dynamics 365 Finance uses historical and expected data to predict future cash positions. Option A (General ledger) is wrong because it records transactions, not forecasts. Option C (Bank reconciliation) is wrong because it matches bank statements, not predicts cash flow. Option D (Payment schedules) is wrong because it manages installment payments, not forecasts.

Answer

General ledger

Answer

Bank reconciliation

Answer

Payment schedules

Question 13

A company uses Dynamics 365 Finance and needs to enforce that purchase orders over $10,000 require approval from the finance manager. What is the most efficient way to configure this?

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

Accepted Answer

Add custom fields to the Fixed asset table to capture location and custodian. Dynamics 365 Finance allows extending standard entities like the Fixed asset table with custom fields to capture additional data such as location and custodian without modifying core logic. This approach leverages the platform's extensibility features (e.g., custom fields on the Fixed asset table) and ensures compliance with the new regulatory requirement while maintaining integration with existing fixed asset processes like depreciation and lifecycle management.

Answer

Implement the Asset management module for tracking

Answer

Use the Inventory management module to track assets as inventory items

Answer

Create a separate custom entity to store asset location and custodian

Question 14

You are the supply chain manager for a global pharmaceutical company that manufactures and distributes temperature-sensitive vaccines. The company uses Dynamics 365 Supply Chain Management with warehouse management and production control. The vaccines must be stored at 2-8°C throughout the supply chain. You need to design a process that ensures: (1) inbound vaccine shipments are inspected and temperature-logged before acceptance, (2) vaccines are immediately moved to a cold storage location upon receipt, (3) picking for outbound orders always prioritizes vaccines with the nearest expiration date (FEFO), and (4) any temperature excursion during storage automatically triggers a quarantine and quality order. Which set of configurations should you implement?

Accepted Answer

Configure a quality association for inbound inspections, location directives for cold storage, set reservation hierarchy to FEFO, and use temperature monitoring with threshold alerts linked to quality orders.. Quality associations automate inbound inspection upon receipt; location directives with temperature zone settings ensure immediate putaway to cold storage; reservation hierarchy enforces FEFO for outbound picking; and temperature monitoring with threshold alerts automatically triggers quality orders for quarantine. Option B is incorrect because periodic manual temperature checks do not provide automatic quarantine triggers, and quality orders alone lack automated association for inbound inspection. Option C uses FIFO instead of FEFO and relies on manual quality orders, missing automation. Option D uses FIFO and does not include temperature monitoring for automatic quarantine triggers.

Answer

Set up inbound inspection via a quality order, use a work template for put-away, enable FEFO reservation, and rely on periodic manual temperature checks.

Answer

Set up a mobile device menu for receipt, use a wave template for put-away, enable FIFO reservation, and use quality orders manually.

Answer

Use a quality order for inbound, create a location directive for cold storage, set reservation hierarchy to FIFO, and enable batch attributes.

Question 15

A retail company uses Dynamics 365 Commerce integrated with Finance and Operations. They want to ensure that inventory levels are updated in real-time when a sale is completed at the point of sale (POS). Which configuration should be enabled?

Accepted Answer

Use the Retail Server and channel data distribution with real-time service. Dynamics 365 Commerce uses the Retail Server and channel data distribution framework with real-time service to synchronize inventory changes instantly from the POS to the Finance and Operations back office. This ensures that inventory levels are updated in real-time when a sale is completed, leveraging the Commerce Data Exchange (CDX) real-time service for immediate data flow.

Answer

Schedule a recurring Data management framework job to import sales transactions

Answer

Enable the asynchronous service (Async Service) for inventory updates

Answer

Configure the Inventory update service in Commerce headquarters

Question 16

Refer to the exhibit. The budget control configuration shows that budget checks are enabled for purchase orders and vendor invoices. A purchase order is created for a budget amount that is 90% of the available budget. What happens during budget checking?

Accepted Answer

A warning is displayed but the purchase order can be posted.. The budget control configuration includes a warning threshold (e.g., 80%), and since the purchase order uses 90% of the available budget, it exceeds the warning threshold but not the error threshold (100%), so a warning is displayed but the purchase order can still be posted. Option A is incorrect because the purchase order is not blocked unless it exceeds the error threshold. Option B is incorrect because budget overrun (exceeding 100%) does not occur. Option C is incorrect because purchase orders are configured for budget checking as shown in the exhibit.

Answer

The purchase order is blocked from posting.

Answer

The purchase order is allowed and budget is overrun.

Answer

The budget check is skipped because purchase orders are not configured.

Question 17

You are an implementation consultant for a company that uses Dynamics 365 Finance. The company wants to automate the reconciliation of bank transactions with bank statements. The finance team currently manually matches bank statement lines to bank transactions in Dynamics 365 Finance. The CFO wants to use the advanced bank reconciliation feature to automate this process. What should you configure?

Accepted Answer

Enable advanced bank reconciliation, import bank statements, and configure matching rules to automatically match bank statement lines to bank transactions.. Advanced bank reconciliation uses matching rules to automate reconciliation. Option B is wrong because bank accounts are required, but the key feature is matching rules. Option C is wrong because cash flow forecasting is separate. Option D is wrong because it describes a manual process.

Answer

Set up bank accounts and manually upload bank statements each day.

Answer

Use the cash flow forecasting feature to predict bank balances and reconcile manually.

Answer

Create bank transaction journals and use the 'Reconcile' button to match each transaction.

Question 18

A company wants to use Dynamics 365 Supply Chain Management to optimize their transportation costs and delivery schedules. Which module should they primarily use?

Accepted Answer

Transportation Management. Transportation Management. The Transportation Management module is specifically designed to manage shipping, freight, and logistics optimization, which directly aligns with the goal of optimizing transportation costs and delivery schedules. Option A (Procurement and Sourcing) is incorrect because it manages purchasing and supplier relationships, not transportation. Option B (Master Planning) is incorrect as it focuses on supply and demand planning, not transportation optimization. Option D (Warehouse Management) is incorrect because it deals with internal warehouse operations, not transportation.

Answer

Procurement and Sourcing

Answer

Master Planning

Answer

Warehouse Management

Question 19

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 20

A multinational manufacturing company uses Dynamics 365 Finance and Operations with multiple legal entities. The finance team needs to run the month-end close process efficiently across all entities, ensuring that intercompany transactions are reconciled and that all journals are posted before consolidation. They want to automate the close workflow. Which feature should they use?

Accepted Answer

Financial period close. Financial period close in Dynamics 365 Finance and Operations provides a structured, automated workflow to manage the month-end close process across multiple legal entities. It enforces a predefined close checklist, ensures intercompany transactions are reconciled, and prevents posting after the close is completed, enabling efficient consolidation.

Answer

Financial reporting

Answer

Intercompany accounting

Answer

Budget control