MB-920 Practice Test 41 — 15 Questions

Question 1

You are a Dynamics 365 Finance consultant for a service company that uses the Project management and accounting module. They need to track project costs and revenue, and bill customers based on time and materials. The company wants to use the 'Work in process' (WIP) accounting method to recognize revenue as costs are incurred. They also need to automatically generate invoices based on project progress. Requirements: 1) Use WIP accounting for projects. 2) Automate invoice generation. 3) Use standard features. Which configuration should you set up?

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

Accepted Answer

Set up a project group with 'Time and material' project type, enable WIP accounting, and define billing rules.. It configures a 'Time and material' project group with WIP accounting enabled and defines billing rules. This setup automatically recognizes revenue as costs are incurred (WIP method) and allows automatic invoice generation based on progress. Option A (accruals) is for non-WIP methods and periodic tasks are not automated. Option B (Fixed-price) is incorrect because the company uses time and materials billing. Option C (manual invoices) does not automate invoice generation. D matches all requirements using standard features.

Answer

Enable 'Accruals' in project parameters and use periodic tasks to generate invoices.

Answer

Configure a project group with the 'Fixed-price' project type and use progress billing.

Answer

Use the 'Cost record' journal to post costs and manually create invoices.

Question 2

A company uses Dynamics 365 Supply Chain Management. They have multiple vendors supplying the same raw material. The procurement manager wants to automatically allocate purchase orders to the vendor with the best combination of price, lead time, and quality rating. Which feature should they use?

Accepted Answer

Vendor bid analysis. Vendor bid analysis in Dynamics 365 Supply Chain Management allows procurement managers to automatically evaluate and compare vendor proposals based on price, lead time, and quality rating. It uses scoring rules to rank bids and can automatically allocate purchase orders to the vendor with the best overall score, enabling data-driven vendor selection without manual intervention.

Answer

Purchase agreements

Answer

Request for quotation

Answer

Vendor collaboration

Question 3

You are a Dynamics 365 administrator for a manufacturing company that uses Dynamics 365 Finance and Supply Chain Management. The company has recently deployed Copilot for Dynamics 365. The accounts payable manager reports that when they ask Copilot to 'Show all overdue invoices', the system returns an error message saying 'I'm sorry, but I can't provide that information.' Other Copilot functions, such as generating financial reports and analyzing variances, work correctly. The manager has the correct security roles and permissions to view overdue invoices through the standard user interface. What is the most likely reason for this behavior?

Accepted Answer

The user does not have a Copilot license assigned.. Copilot for Dynamics 365 requires a separate Copilot license assigned to each user. Even though the user has the correct Dynamics 365 licenses and security roles to view overdue invoices through the standard UI, they cannot use Copilot to retrieve that information without the Copilot license. The error message 'I'm sorry, but I can't provide that information' is a common indicator of a missing Copilot license. Option A is incorrect because the other Copilot functions work correctly, showing the service is available. Option C is incorrect because the user can view overdue invoices via the UI, indicating the privilege is present. Option D is incorrect because Copilot for Finance is not a module that can be disabled; it's a per-user license feature.

Answer

The Copilot service is temporarily unavailable.

Answer

The user's security role does not include the 'View overdue invoices' privilege.

Answer

The Copilot for Finance module is disabled in the system parameters.

Question 4

A company uses Dynamics 365 Finance. The accountant needs to view the current balance of a specific ledger account at any time. Which inquiry should they use?

Accepted Answer

Trial balance. Trial balance shows the balance of each ledger account for a specified period, allowing the accountant to view the current balance. Option B is incorrect because Ledger settlement is used for matching debits and credits, not for viewing balances. Option C is incorrect because Chart of accounts is a list of accounts, not balances. Option D is incorrect because Financial reporting generates reports but not real-time balance for a single account.

Answer

Ledger settlement

Answer

Chart of accounts

Answer

Financial reporting

Question 5

You are the project manager for a large engineering firm that uses Dynamics 365 Project Operations. Your organization has recently deployed Project Operations and is using it to manage multiple concurrent projects. You have been assigned to a new project named 'Bridge Construction' which is a fixed-price contract with a total value of $2,000,000. The project is scheduled to run for 12 months. During the first month, the team encounters an unexpected geological issue that requires additional surveying work. This additional work will require 200 hours of a senior geologist's time and 100 hours of a surveyor's time. The project contract has not accounted for this scope change. You need to ensure that the project stays profitable and that the client is billed appropriately. The client is open to change orders but expects formal documentation. What should you do?

Accepted Answer

Create a change order in the project contract to reflect the additional scope, then update the WBS and budget.. In Dynamics 365 Project Operations, when a fixed-price contract encounters unplanned scope, the correct process is to create a change order on the project contract to formally document the scope change, update the Work Breakdown Structure (WBS) with the new tasks, and adjust the budget accordingly. This ensures the client is billed correctly through the contract's billing rules and maintains project profitability by tracking the additional costs against the revised budget.

Answer

Create a separate internal project to track the additional costs and invoice the client manually.

Answer

Proceed with the work and adjust the final invoice at project completion.

Answer

Add the additional labor tasks to the existing work breakdown structure (WBS) and increase the project budget accordingly.

Question 6

A company uses Dynamics 365 Finance with multiple legal entities. The accounting manager notices that when intercompany transactions are posted, the due-to and due-from accounts are not automatically created. The intercompany setup appears correct, but the transactions fail to generate the intercompany accounting entries. What should you verify first?

Accepted Answer

Check the intercompany accounting setup for the due-to and due-from account mappings.. The intercompany accounting setup defines the specific due-to and due-from account mappings for each intercompany relationship. Without these mappings, the system cannot generate the offset entries, even if other settings are correct. Option B is wrong because currency configuration affects exchange rate calculations but not the creation of due-to/due-from accounts. Option C is wrong because while the chart of accounts must include intercompany accounts, the first verification step should be the mapping setup that tells the system which accounts to use. Option D is wrong because default financial dimensions do not control intercompany accounting entries.

Answer

Confirm that the intercompany currency is properly configured.

Answer

Verify that the chart of accounts includes intercompany accounts.

Answer

Ensure each legal entity has a default financial dimension set.

Question 7

A retail company using Dynamics 365 Finance notices that sales tax is not being calculated correctly on invoices for cross-border transactions. The tax setup includes multiple tax codes and tax groups. What is the most likely cause?

Accepted Answer

Tax codes are not correctly assigned to the items or customers involved.. If tax codes are not assigned to items or customers, the system cannot determine the appropriate tax rate, leading to incorrect calculations. Option B is wrong because the tax authority configuration is about reporting and remittance, not calculation. Option C is wrong because ledger posting groups only affect where tax amounts are posted, not how they are calculated. Option D is wrong because withholding tax is a separate deduction and does not impact sales tax calculation.

Answer

The tax authority is not configured for cross-border transactions.

Answer

The ledger posting group for sales tax is set incorrectly.

Answer

Withholding tax is enabled for the vendor.

Question 8

A company uses Dynamics 365 Finance and has enabled the 'Budget control' feature. Users report that they cannot post purchase requisitions even though sufficient budget is available. What is the most likely cause?

Accepted Answer

Budget register entries have not been created for the current fiscal year.. Budget control requires budget register entries to be created and posted for the current fiscal year to establish the budget amounts. Without these entries, the system has no budget to compare against, so even if sufficient budget appears available, the control cannot validate and will block the requisition. Option A is incorrect because permissions do not affect budget control checks. Option B is incorrect because the feature is enabled (as stated), so it is not disabled for the legal entity. Option D is incorrect because budget control can be configured for purchase requisitions, but the issue is the missing budget register entries.

Answer

Users do not have permission to post purchase requisitions.

Answer

Budget control is disabled for the legal entity.

Answer

Budget control is configured to check only purchase orders.

Question 9

A manufacturer uses Dynamics 365 Supply Chain Management and wants to implement a quality control process where incoming raw materials are inspected before being accepted into inventory. Which feature should they use to enforce that inspection?

Accepted Answer

Quality orders. Quality orders in Dynamics 365 Supply Chain Management are the correct feature because they allow you to define inspection requirements for incoming raw materials, automatically blocking receipt or putaway until the inspection is completed and the order is approved. This enforces a mandatory quality check before inventory is accepted, directly meeting the requirement.

Answer

Quarantine zones

Answer

Inventory journals

Answer

Nonconformance management

Question 10

Which THREE modules are part of Dynamics 365 Commerce?

Accepted Answer

Point of sale (POS). Point of Sale (POS) is a core module of Dynamics 365 Commerce that enables in-store transactions, inventory management, and customer engagement at the physical retail location. It integrates directly with the online store and call center modules to provide a unified omnichannel commerce experience.

Answer

Budgeting

Answer

Production control

Question 11

A company uses Dynamics 365 Commerce. They want to offer a promotion: 'Buy one, get one free' for specific products. Which pricing engine capability should they use?

Accepted Answer

Mix and match discounts. The 'Buy one, get one free' promotion is a classic mix and match scenario where a specific combination of products (e.g., two items from a defined set) triggers a discount. In Dynamics 365 Commerce, the Mix and match discount engine is designed to handle such promotional offers by defining a set of products and the required quantity to qualify for a discount, including free items. This capability allows the system to automatically apply the discount at the point of sale when the correct product combination is scanned.

Answer

Quantity discount

Answer

Periodic discount

Answer

Total discount

Question 12

A company wants to use Dynamics 365 Finance to automatically recognize revenue over time for subscription-based services. Which feature should they configure?

Accepted Answer

Revenue recognition. Revenue recognition in Dynamics 365 Finance enables automatic scheduling and deferral of revenue based on contract terms, such as subscription services. It uses deferred revenue schedules and fair value allocation to recognize revenue over time, aligning with ASC 606 and IFRS 15 standards.

Answer

Fixed assets management

Answer

Accounts payable

Answer

Budgeting

Question 13

A company wants to use AI to predict potential stockouts and suggest replenishment actions. Which Dynamics 365 Supply Chain Management capability should they leverage?

Accepted Answer

Demand forecasting. Demand forecasting in Dynamics 365 Supply Chain Management uses AI and machine learning to analyze historical data, seasonal patterns, and external factors to predict future demand. This capability directly addresses the need to predict potential stockouts and suggest replenishment actions by generating accurate demand predictions that feed into planning processes.

Answer

Master planning

Answer

IoT Intelligence

Answer

Inventory optimization

Question 14

A company uses Dynamics 365 Finance and needs to allocate overhead costs from a cost center to multiple departments based on square footage. Which costing method should be used?

Accepted Answer

Cost allocation. Cost allocation in Dynamics 365 Finance allows distributing costs based on allocation bases such as square footage. Option A is incorrect because activity-based costing assigns costs based on activities, not directly by allocation bases like square footage for overhead allocation between departments. Option C is incorrect because standard costing is primarily used for inventory valuation and cost management, not for allocating overhead costs. Option D is incorrect because absorption costing is a method for assigning all manufacturing costs to products, not for distributing costs from a cost center to departments.

Answer

Activity-based costing

Answer

Standard costing

Answer

Absorption costing

Question 15

A company wants to ensure that quality inspections are performed on a random sample of incoming raw materials. Which feature should be configured in Dynamics 365 Supply Chain Management?

Accepted Answer

Quality orders with sampling plans. Quality orders can be automatically generated based on sampling plans to perform inspections on a random sample of incoming raw materials. Option A is incorrect because quarantine zones are used to isolate nonconforming materials after inspection, not for random sampling. Option C is incorrect because disposition codes are used to define the outcome of a quality order, not to trigger inspections. Option D is incorrect because nonconformance management is used to manage issues after a nonconformance is identified, not to perform random inspections.

Answer

Quarantine zones

Answer

Disposition codes

Answer

Nonconformance management