MB-920 Practice Test 38 — 15 Questions

Question 1

A manufacturing company uses Dynamics 365 Finance and Supply Chain Management. The finance department wants to allocate overhead costs to production orders based on machine hours. Which costing method should they configure?

Accepted Answer

Absorption costing. Option C is correct because absorption costing uses predetermined overhead rates based on machine hours. Option A is wrong because variable costing only includes variable costs. Option B is wrong because standard costing uses standard rates but not specifically for overhead allocation. Option D is wrong because job costing tracks costs per job but not overhead allocation.

Answer

Variable costing

Answer

Standard costing

Answer

Job costing

Question 2

Which TWO features in Dynamics 365 Finance can help automate accounts payable processes?

Accepted Answer

Vendor invoice automation. Options A and C are correct. Vendor invoice automation automatically processes invoices, and payment proposals generate payments based on due dates. Option B is wrong because collections management is for accounts receivable. Option D is wrong because bank reconciliation is for cash management. Option E is wrong because customer payment predictions is for accounts receivable.

Answer

Collections management

Answer

Bank reconciliation

Answer

Customer payment predictions

Question 3

A company wants to use AI to automatically classify vendor invoices in Dynamics 365 Finance. Which feature should be enabled?

Accepted Answer

Invoice capture. Option B is correct because AI for invoice classification is part of the Invoice capture feature in Dynamics 365 Finance. Option A is wrong because Vendor collaboration does not use AI. Option C is wrong because Optical character recognition (OCR) is a component but not the feature name. Option D is wrong because Intelligent order management is for sales orders.

Answer

Intelligent order management

Answer

Vendor collaboration

Answer

Optical character recognition (OCR)

Question 4

A company is implementing Dynamics 365 Finance and needs to support multiple legal entities with different fiscal calendars. Which feature should be used to manage this requirement?

Accepted Answer

Individual fiscal calendars assigned to each legal entity.. Option B is correct because Dynamics 365 Finance supports multiple fiscal calendars at the legal entity level. Option A is wrong because shared fiscal calendars are not used across legal entities with different calendars. Option C is wrong because fiscal year templates are for standard patterns, not entity-specific calendars. Option D is wrong because ledger periods are part of the calendar, not the feature for managing multiple calendars.

Answer

Fiscal year templates applied to all entities.

Answer

Shared fiscal calendars across all legal entities.

Answer

Ledger period configurations in the general ledger.

Question 5

Which TWO account types are commonly used in the chart of accounts in Dynamics 365 Finance? (Choose two.)

Accepted Answer

Profit and loss accounts.. Options A and C are correct. Balance sheet accounts and profit and loss accounts are the main types. Option B is wrong because budget accounts are not part of the chart of accounts. Option D is wrong because statistical accounts are for non-financial data. Option E is wrong because reporting accounts are not a standard account type.

Answer

Statistical accounts.

Answer

Budget accounts.

Answer

Reporting accounts.

Question 6

Which TWO features in Dynamics 365 Finance help ensure compliance with regulatory reporting requirements?

Accepted Answer

Electronic reporting (ER) tool. Options A and D are correct. The Electronic reporting (ER) tool is used to generate regulatory reports, and tax reporting features handle specific tax compliance. Option B is incorrect because budget control manages spending, not regulatory compliance. Option C is incorrect because fixed asset management tracks assets but doesn't generate regulatory reports. Option E is incorrect because vendor collaboration is for vendor communication.

Answer

Budget control

Answer

Fixed asset management

Answer

Vendor collaboration

Question 7

An organization uses Dynamics 365 Finance to manage its cash and bank accounts. The treasurer needs to reconcile a bank statement with the system's bank transactions. Which module should the treasurer use?

Accepted Answer

Cash and bank management. Cash and bank management handles bank reconciliation. Accounts payable and Accounts receivable are for vendor and customer transactions. General ledger is for the chart of accounts.

Answer

Accounts payable

Answer

General ledger

Answer

Accounts receivable

Question 8

Refer to the exhibit. A sales order in Dynamics 365 Finance has a line discount of 10% and a header discount of 5%. What is the net amount for the line item after both discounts?

Accepted Answer

$1,282.50. First apply line discount: 10 * 150 = 1500, minus 10% = 1350. Then apply header discount: 1350 minus 5% = 1282.50.

Answer

$1,500.00

Answer

$1,425.00

Answer

$1,350.00

Question 9

Which TWO of the following are valid actions when using the 'Vendor collaboration' workspace in Dynamics 365 Finance?

Accepted Answer

Vendors can respond to purchase order confirmations.. Options A and D are correct. Vendor collaboration allows vendors to view invoices and respond to purchase orders. Option B is wrong because vendors cannot approve purchase requisitions. Option C is wrong because vendors cannot create purchase orders; they can respond to them. Option E is wrong because vendors cannot update item prices directly.

Answer

Vendors can approve purchase requisitions.

Answer

Vendors can update item prices.

Answer

Vendors can create purchase orders.

Question 10

An organization is implementing Dynamics 365 Finance and must configure a fiscal calendar that aligns with a 4-4-5 retail calendar. Which approach should they use?

Accepted Answer

Create a custom period template based on the 4-4-5 pattern.. Option D is correct because Dynamics 365 Finance supports custom period templates like 4-4-5. Option A is wrong because the standard calendar is 12 months. Option B is wrong because fiscal year date intervals define date ranges, not period patterns. Option C is wrong because the period close template manages closing processes.

Answer

Define fiscal year date intervals.

Answer

Use the standard calendar and manually adjust periods each year.

Answer

Use the period close template.

Question 11

A company uses Dynamics 365 Finance with multiple legal entities. The finance team needs to enforce a consistent chart of accounts across all entities. Which feature should they use?

Accepted Answer

Shared chart of accounts. Option B is correct because shared chart of accounts allows a single chart of accounts to be used across legal entities. Option A is wrong because financial dimensions are for segmentation, not enforcement. Option C is wrong because each legal entity can have its own chart of accounts. Option D is wrong because main accounts are part of the chart but not the enforcement mechanism.

Answer

Financial dimensions

Answer

Legal entity override

Answer

Main account categories

Question 12

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.. Option B is correct because the threshold warning is set at 80%, so 90% triggers a warning but not an error (error is 100%). Option A is wrong because the error threshold is 100%. Option C is wrong because budget overrun is not allowed with error threshold. Option D is wrong because the check is performed.

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 13

An organization needs to track the budget versus actual expenses for each department in real time. Which Dynamics 365 Finance feature should be used?

Accepted Answer

Budget control. Option A is correct because budget control in Dynamics 365 Finance enables real-time tracking of budget vs. actuals. Option B is wrong because budget planning is for creating budgets. Option C is wrong because the General ledger records actuals but does not automatically compare to budget in real time. Option D is wrong because financial reports can be generated on demand but are not real-time by default.

Answer

Budget planning

Answer

General ledger

Answer

Financial reports

Question 14

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.. Option D is correct because the Foreign currency revaluation feature in Dynamics 365 Finance automates the process and posts differences to the specified accounts. Option A is wrong because manual journal entries are error-prone and not automated. Option B is wrong because exchange rate types define rates, not automate revaluation. Option C is wrong because the General journal does not automatically revalue accounts.

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 15

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.. Option A is correct. In Dynamics 365 Finance, the shared chart of accounts feature allows a single chart of accounts to be used across multiple legal entities, ensuring consistency and simplifying maintenance. Option B is incorrect because separate charts per entity increase complexity. Option C is incorrect because financial dimensions are used for tracking, not for sharing accounts. Option D is incorrect because deleting accounts is 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.