MB-920 Practice Test 43 — 15 Questions

Question 1

You are a finance manager for a multinational corporation using Dynamics 365 Finance. The company needs to comply with the new revenue recognition standard (ASC 606). They sell products and services in bundled contracts, and revenue must be allocated to performance obligations based on standalone selling prices. The system must automatically allocate the transaction price to each obligation and recognize revenue over time. Currently, the finance team manually calculates allocations in Excel. You need to configure Dynamics 365 Finance to automate revenue recognition for these bundled contracts. The company uses the Project management and accounting module for services and the Sales module for products. What should you do?

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

Accepted Answer

Configure the Revenue recognition module to create revenue schedules from sales orders and project proposals.. Dynamics 365 Finance includes a dedicated Revenue recognition module that can automatically create revenue schedules from sales orders (for products) and project proposals (for services). This automates the allocation of transaction prices to performance obligations based on standalone selling prices, complying with ASC 606 without manual Excel calculations.

Answer

Create separate invoices for products and services and recognize revenue manually.

Answer

Use the General ledger allocation rules to distribute revenue amounts manually.

Answer

Set up revenue recognition schedules in the Project management and accounting module only.

Question 2

A retail company using Dynamics 365 Commerce wants to implement a loyalty program that rewards customers based on purchase frequency and total spend. They need to assign different point multipliers for specific product categories. Which configuration should they use?

Accepted Answer

Loyalty program rules. Loyalty program rules in Dynamics 365 Commerce allow you to define earning and redemption rules, including point multipliers based on product categories. This configuration directly supports rewarding customers based on purchase frequency and total spend while assigning different multipliers for specific categories, making it the correct choice.

Answer

Category hierarchy rules

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Assortment management

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Channel navigation hierarchy

Question 3

A manufacturing company uses Dynamics 365 Supply Chain Management. The production manager wants to reduce setup time on a bottleneck machine. Which THREE actions should the manager take?

Accepted Answer

Define operation properties to sequence orders by setup similarity.. Defining operation properties allows the system to sequence production orders on a bottleneck resource based on setup similarity, reducing changeover time. In Dynamics 365 Supply Chain Management, operation properties are attributes assigned to operations that the scheduling engine uses to group similar setups together, minimizing the number and duration of setup changes.

Answer

Increase the batch size for all production orders on that machine.

Answer

Implement external setup procedures that run while the machine is running.

Question 4

A Dynamics 365 Finance administrator configures a financial dimension called 'Department' with the following dimension values: 100 - Sales, 200 - Marketing, 300 - IT, 400 - HR. An accountant needs to post an expense to the Marketing department. Which dimension value should they use?

Accepted Answer

200. In Dynamics 365 Finance, financial dimensions use a code-value structure. The dimension value code for Marketing is 200. When posting transactions, the code is used, not the display name. Therefore, the accountant must use dimension value 200 to post an expense to the Marketing department.

Answer

100

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300

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400

Question 5

A company uses Dynamics 365 Finance and has multiple legal entities. They want to share a chart of accounts across all entities while allowing different fiscal calendars. What configuration should be used?

Accepted Answer

Shared chart of accounts with entity-specific fiscal calendars. D is correct because Dynamics 365 Finance allows a shared chart of accounts across legal entities while enabling entity-specific fiscal calendars. This configuration meets the requirement of maintaining a unified account structure for reporting and consolidation, while respecting local regulatory or business needs for different fiscal year periods.

Answer

Single fiscal calendar for all entities

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Separate chart of accounts per entity

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Consolidations with elimination

Question 6

A company is implementing Dynamics 365 Project Operations and wants to ensure that project costs are accurately tracked for both time and materials (T&M) and fixed-price contracts. The company uses a single project for both types of contracts. Which approach should be used to correctly invoice each contract type?

Accepted Answer

Create two project contracts, one T&M and one fixed-price, and link both to the same project.. Dynamics 365 Project Operations allows multiple project contracts to be linked to a single project, enabling different billing methods (T&M and fixed-price) for the same project. This ensures that time and material costs are tracked and invoiced according to the T&M contract terms, while fixed-price milestones are invoiced under the fixed-price contract, all from the same project data.

Answer

Create two separate projects and link each to its own contract.

Answer

Create a single project contract with the billing method set to fixed-price and adjust invoices manually.

Answer

Create one project contract with a billing method of T&M and manually create invoices for the fixed-price portion.

Question 7

A company uses Dynamics 365 Supply Chain Management to manage multi-site operations. They need to transfer inventory between two warehouses in different legal entities. What is the correct approach?

Accepted Answer

Use intercompany order processing to create a purchase order and sales order.. Intercompany order processing is the correct approach for transferring inventory between warehouses in different legal entities. It creates a purchase order in the receiving company and a sales order in the sending company, properly recording the transaction across legal entities. Option A is incorrect because inventory adjustment journals do not track intercompany transfers and are meant for internal adjustments. Option B is incorrect because transfer orders are only valid within a single legal entity. Option C is incorrect because a purchase order alone does not create the corresponding sales order needed for intercompany accounting.

Answer

Use an inventory adjustment journal to reduce stock in one warehouse and increase in the other.

Answer

Create a transfer order between the two warehouses.

Answer

Create a purchase order from the receiving warehouse to the sending warehouse.

Question 8

Drag and drop the steps to create a new budget in Dynamics 365 Finance in the correct order.

Accepted Answer

Step 1: Open budget register entry, Step 2: Select budget model and financial dimensions, Step 3: Enter budget amounts, Step 4: Submit the budget register entry.. Creating a budget starts with the budget register, selecting model/dimensions, entering amounts, and submitting.

Answer

Step 1: Open budget register entry, Step 2: Enter budget amounts, Step 3: Select budget model and financial dimensions, Step 4: Submit the budget register entry.

Answer

Step 1: Select budget model and financial dimensions, Step 2: Open budget register entry, Step 3: Enter budget amounts, Step 4: Submit the budget register entry.

Answer

Step 1: Open budget register entry, Step 2: Select budget model and financial dimensions, Step 3: Submit the budget register entry, Step 4: Enter budget amounts.

Question 9

Which TWO configurations are required to enable intercompany accounting in Dynamics 365 Finance?

Accepted Answer

Intercompany accounting sequences. Options A and B are correct. Intercompany accounting sequences must be set up to define the document numbering for intercompany transactions, and intercompany partners must be defined to establish the legal entities involved. Option C is incorrect because a shared chart of accounts is beneficial but not required. Option D is incorrect because currency revaluation is a separate process not mandatory for intercompany accounting. Option E is incorrect because budget control configuration is unrelated to intercompany accounting.

Answer

Shared chart of accounts across legal entities

Answer

Currency revaluation rules

Answer

Budget control configuration

Question 10

A company uses Dynamics 365 Finance and Operations. They want to automate the approval of purchase orders based on the total amount. What should they configure?

Accepted Answer

Workflow for purchase orders. Workflows in Dynamics 365 Finance and Operations allow you to define automated business processes, such as approval of purchase orders based on conditions like total amount. By configuring a workflow for purchase orders, you can set up conditional approval rules (e.g., if amount > $5,000, route to manager; if > $20,000, route to director) without custom code. This directly addresses the requirement to automate approval based on the total amount.

Answer

Procurement catalog

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Vendor master

Answer

Purchase order form configuration

Question 11

A manufacturing company uses Dynamics 365 Supply Chain Management. They want to reduce inventory holding costs by implementing a strategy where materials are ordered only when needed for production. Which inventory strategy should they use?

Accepted Answer

Just-in-time (JIT). Just-in-time (JIT) is the correct inventory strategy because it aligns with the goal of reducing holding costs by ordering materials only when they are needed for production. In Dynamics 365 Supply Chain Management, JIT can be implemented using kanban rules and lean manufacturing principles, which trigger replenishment based on actual consumption rather than forecasted demand, minimizing inventory levels.

Answer

Reorder point

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Economic order quantity (EOQ)

Answer

Safety stock

Question 12

A company uses Dynamics 365 Human Resources. They want to streamline the employee onboarding process by automating document collection and task assignments. Which feature should they use?

Accepted Answer

Personnel management. Personnel management in Dynamics 365 Human Resources provides the 'Hire' and 'Onboard' workflows that automate document collection (e.g., tax forms, employment agreements) and task assignments (e.g., IT setup, training) during employee onboarding. This feature uses configurable checklists and document templates to streamline the process, directly addressing the requirement.

Answer

Benefits management

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Time and attendance

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Compensation management

Question 13

A furniture manufacturer uses Dynamics 365 Supply Chain Management. They need to ensure that raw materials are replenished automatically when inventory falls below a certain level. Which feature should be configured?

Accepted Answer

Reorder point. The reorder point feature in Dynamics 365 Supply Chain Management triggers automatic replenishment when inventory levels drop to a predefined threshold. This ensures raw materials are reordered without manual intervention, directly addressing the requirement for automatic replenishment when inventory falls below a certain level.

Answer

Vendor collaboration

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Safety stock

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Master planning

Question 14

A company is implementing Dynamics 365 Finance and needs to configure a chart of accounts that supports multiple legal entities with different fiscal requirements. Which structure should be used?

Accepted Answer

Use a shared chart of accounts with separate fiscal calendars per legal entity.. A shared chart of accounts is the recommended approach in Dynamics 365 Finance when multiple legal entities must operate under different fiscal requirements. By sharing the chart of accounts but assigning separate fiscal calendars per legal entity, the organization maintains a consistent account structure across entities while allowing each entity to comply with its own fiscal year, period definitions, and closing schedules. This balances standardization with regulatory flexibility.

Answer

Use a single shared chart of accounts with one shared fiscal calendar.

Answer

Use main accounts only without dimensions.

Answer

Create a separate chart of accounts for each legal entity.

Question 15

A retail company with 500 employees is deploying Dynamics 365 Human Resources. They need to ensure that employees can view their own pay slips and update personal information from a mobile app. Which component should they enable?

Accepted Answer

Employee self service. Employee self service (C) is the correct component because it is specifically designed to allow employees to view their own pay slips and update personal information from a mobile app. In Dynamics 365 Human Resources, the Employee self service workspace provides role-based access for employees to perform these tasks without requiring manager or HR intervention.

Answer

Recruitment

Answer

Manager self service

Answer

Compensation management