MB-920 Practice Test 49 — 15 Questions

Question 1

Which TWO of the following are benefits of using the General ledger module in Dynamics 365 Finance?

Accepted Answer

Provides a chart of accounts to categorize financial transactions. Options C and D are correct. Option C is correct because the General ledger provides a chart of accounts to categorize financial transactions. Option D is correct because it offers real-time financial insights and reporting. Option A is wrong because managing vendor payments and invoices is done in Accounts payable. Option B is wrong because handling customer invoicing and collections is done in Accounts receivable. Option E is wrong because inventory valuation is part of Inventory management.

Answer

Manages vendor payments and invoices

Answer

Handles customer invoicing and collections

Answer

Manages inventory valuation

Question 2

Which TWO features in Dynamics 365 Finance help organizations comply with regulatory requirements for financial reporting? (Choose two.)

Accepted Answer

Audit trails and change logs.. Options D and E are correct. Audit trails and change logs track changes to financial data, providing transparency required for regulatory compliance. Financial reporting (Management Reporter) enables organizations to create custom reports that meet specific regulatory formats. Option A is incorrect because vendor invoice automation is an operational feature, not directly related to regulatory reporting. Option B is incorrect because payment schedules manage cash flow, not compliance. Option C is incorrect because budget control focuses on spending limits, not reporting requirements.

Answer

Vendor invoice automation.

Answer

Payment schedules.

Answer

Budget control.

Question 3

A company uses Dynamics 365 Finance and needs to track expenses by department and project. Which dimension type should be used to capture this information?

Accepted Answer

Financial dimensions.. Financial dimensions (Option D) are used to track attributes like department and project in Dynamics 365 Finance. Account structures (Option A) define the chart of accounts, not for tracking additional attributes. Dimension sets (Option B) are used for reporting and analysis, not for transaction capture. Advanced rules (Option C) allow for conditional dimension combinations, but the base dimension type for capturing department and project is financial dimensions.

Answer

Account structures.

Answer

Dimension sets.

Answer

Advanced rules.

Question 4

Your company is implementing Dynamics 365 Finance and needs to manage intercompany transactions. Which TWO statements about intercompany accounting are correct?

Accepted Answer

Intercompany transactions can be eliminated during consolidation using elimination rules.. Intercompany transactions can be eliminated during consolidation using elimination rules, which is a standard feature in Dynamics 365 Finance to remove intercompany balances from consolidated financial statements. Option C is correct because intercompany journals allow users to transfer balances directly between legal entities, supporting various intercompany transactions beyond sales orders. Option A is incorrect because intercompany transactions are not limited to sales orders; they include purchases, journals, and other document types. Option D is incorrect because intercompany transactions can be automated using intercompany setup and parameters, not requiring manual entry in each legal entity. Option E is incorrect because elimination rules are specifically designed to eliminate intercompany transactions during consolidation.

Answer

Intercompany transactions are only supported for sales orders.

Answer

Intercompany transactions must be entered manually in each legal entity.

Answer

Intercompany transactions cannot be eliminated during consolidation.

Question 5

A company uses Dynamics 365 Supply Chain Management and wants to implement a strategy where products are stored at multiple warehouse locations, but picking is optimized by consolidating orders from the nearest location to the customer. Which configuration supports this?

Accepted Answer

Set up multi-site warehouse management and use location directives. Multi-site warehouse management with location directives allows routing of picking to the nearest warehouse based on distance or zone. Option A is correct because location directives can be configured to prioritize picking from the warehouse closest to the customer's ship-to address. Option B (Vendor-managed inventory) is a supplier strategy, not internal optimization. Option C (Transfer orders) moves stock between warehouses but does not automatically optimize picking across sites. Option D (Single warehouse with multiple zones) stores products within one physical location and cannot consolidate orders across different sites.

Answer

Implement vendor-managed inventory for all products

Answer

Use transfer orders to move stock between warehouses

Answer

Configure a single warehouse with multiple zones

Question 6

Refer to the exhibit. A user tries to post a journal with the account string 1234567-IT-CC001. The general ledger account structure requires main account (7 characters), department (3 characters), and cost center (4 characters). The system rejects the entry. What is the most likely reason?

Accepted Answer

The department segment length is incorrect.. The department segment 'IT' is only 2 characters long, but the account structure requires a department of 3 characters. This violation of segment length causes the journal to be rejected. Option A is incorrect because the cost center segment length is not the primary issue (though it may also be incorrect). Option C is incorrect because the main account segment '1234567' has exactly 7 characters. Option D is incorrect because the issue is segment length, not the existence of the department value.

Answer

The cost center segment length is incorrect.

Answer

The main account segment length is incorrect.

Answer

The department value does not exist in the dimension values.

Question 7

A multinational company using Dynamics 365 Finance needs to comply with local tax reporting requirements in multiple countries. The tax rates and rules change frequently. Which tool should you use to manage tax configurations without customizing the code?

Accepted Answer

Tax engine.. The Tax engine in Dynamics 365 Finance allows you to configure tax rules and rates without customizing code, supporting multi-country compliance. Option A (General ledger parameters) is wrong because it deals with ledger setup, not specific tax configurations. Option B (Electronic reporting module) is wrong because it is used for generating regulatory reports, not for configuring tax rules. Option D (Feature management) is wrong because it enables or disables features, but does not manage tax configurations.

Answer

General ledger parameters.

Answer

Electronic reporting module.

Answer

Feature management.

Question 8

Refer to the exhibit. A Dynamics 365 Finance analyst runs the KQL query shown against the FinanceTransactions table. What is the result?

Accepted Answer

Top 5 account categories by total amount for 2023. The query filters for Year == 2023, groups by AccountCategory, sums the Amount for each category, orders by total amount descending, and uses take 5 to return the top 5 categories. Option A is incorrect because it says 'all account categories' but the query only returns the top 5. Option B is incorrect because it suggests grouping by month, while the query groups by AccountCategory. Option C is incorrect because it refers to 2024, but the filter is for 2023.

Answer

All account categories with their total amounts for 2023

Answer

Monthly total amounts for each account category in 2023

Answer

Top 5 account categories by total amount for 2024

Question 9

Which TWO of the following are prerequisites for setting up consolidation in Dynamics 365 Finance?

Accepted Answer

Multiple legal entities must be set up.. Options C and D are correct. Consolidation in Dynamics 365 Finance requires multiple legal entities to be set up and the chart of accounts must be consistent across entities. Option A is incorrect because entities can use different fiscal calendars; adjustments can be made during consolidation. Option B is incorrect because intercompany transactions are not a prerequisite; consolidation can be performed without them. Option E is incorrect because workflow is optional and not required for consolidation journals.

Answer

All entities must use the same fiscal calendar.

Answer

Intercompany transactions must be configured.

Answer

Workflow must be enabled for consolidation journals.

Question 10

Refer to the exhibit. The period close checklist shows that adjusting entries are pending and depreciation has not started. The accountant wants to run the consolidation process now. What will happen if they attempt to consolidate before completing the other steps?

Accepted Answer

Consolidation can proceed but may produce inaccurate results because adjusting entries and depreciation are missing.. In Dynamics 365 Finance, the period close checklist does not enforce a strict dependency for consolidation. The system will allow the consolidation process to run even if some steps (like adjusting entries and depreciation) are incomplete. However, because these steps affect the financial data, the consolidated results may be inaccurate or incomplete. Option A is incorrect because the system does not block consolidation; it is advisory. Option B is incorrect because consolidation may still run, but the results will be affected by missing depreciation. Option C is incorrect because the system does not automatically post pending steps; those must be completed manually.

Answer

The system will block the consolidation until all steps are completed.

Answer

The consolidation process will fail due to missing depreciation.

Answer

The system will automatically post the pending steps before consolidation.

Question 11

During a month-end close, a Dynamics 365 Finance user encounters an error when trying to post a vendor invoice. The invoice has been approved but the system shows 'Invoice posting failed due to account validation'. What is the most likely cause?

Accepted Answer

The account combination used is not valid in the chart of accounts.. The most likely cause is an invalid account combination in the chart of accounts (Option D). When a vendor invoice is approved but fails to post with an account validation error, it typically indicates that the debit or credit account specified on the invoice lines does not exist or is not properly configured in the general ledger. Option A is incorrect because a vendor on hold would prevent payment, not invoice posting and validation. Option B is incorrect because the invoice has already been approved, so approval status is not the issue. Option C is incorrect because general ledger journal posting is part of the invoice posting process, not a separate prerequisite. Therefore, the account combination validation failure during the invoice posting process is the most common cause.

Answer

The vendor is on hold in accounts payable.

Answer

The invoice has not been approved by the workflow.

Answer

The general ledger journal for the invoice is not yet posted.

Question 12

A multinational company uses Dynamics 365 Finance and needs to report financial results in both the local currency (EUR) and the reporting currency (USD). The exchange rates fluctuate daily. What is the recommended approach to handle currency translation for financial reporting?

Accepted Answer

Define a reporting currency in the ledger setup and use translation methods.. Dynamics 365 Finance allows defining a reporting currency in the ledger setup, which automatically translates amounts using exchange rates and translation methods like current rate or temporal method. Option A is incorrect because manual adjustments are error-prone and inefficient. Option C is incorrect because separate legal entities are not needed; reporting currency is a ledger-level feature. Option D is incorrect because periodic exchange rate adjustments are used for revaluation of open transactions, not for financial reporting translation.

Answer

Create a separate ledger for USD and manually adjust entries.

Answer

Set up two legal entities, one for EUR and one for USD.

Answer

Use the periodic exchange rate adjustment to update currency values.

Question 13

Refer to the exhibit. The exhibit shows a vendor invoice with a cash discount. If the company pays the invoice on January 25, 2024, what is the payment amount?

Accepted Answer

4900. 2% discount if paid by January 30, so payment = 5000 * 0.98 = 4900. Option A (4800) is wrong because it applies a 4% discount instead of 2%. Option B (5000) is wrong because it does not apply any discount. Option D (4950) is wrong because it applies only a 1% discount.

Answer

4800

Answer

5000

Answer

4950

Question 14

A company uses Dynamics 365 Finance and Operations. They are experiencing slow performance in the general ledger module when generating financial statements. The database administrator notices that the general journal table has grown significantly. Which action should they take to improve performance?

Accepted Answer

Use the Data archiving feature to archive old journal entries.. The Data archiving feature in Dynamics 365 Finance and Operations allows moving old journal entries to a separate archive, reducing the table size and improving query performance without permanently deleting data. Option A is incorrect because partitioning the table may help but does not remove data; archiving is a better practice for reducing data volume. Option B is incorrect because adding indexes can improve read performance but also degrades write performance and does not address the root cause of large table size. Option C is incorrect because purging journal entries older than two years permanently deletes data that may be needed for reporting or legal purposes; archiving retains it.

Answer

Partition the general journal table by fiscal year.

Answer

Add additional indexes to the general journal table.

Answer

Purge all journal entries older than two years.

Question 15

A manufacturing company uses Dynamics 365 Finance to manage its financial operations. The company recently acquired a subsidiary and needs to consolidate financial statements. The subsidiary uses a different fiscal calendar and chart of accounts. What is the recommended approach to consolidate financial data?

Accepted Answer

Use the Consolidate with elimination feature in Dynamics 365 Finance, mapping the subsidiary's accounts to the parent company's chart of accounts.. The Consolidate with elimination feature in Dynamics 365 Finance is designed to consolidate financial data from multiple legal entities, supporting different fiscal calendars and charts of accounts through account mapping and intercompany elimination. Option A is wrong because recreating the subsidiary's chart of accounts is unnecessary and time-consuming; the consolidation feature handles mapping. Option B is wrong because manually exporting and consolidating trial balance data is inefficient and error-prone compared to using the built-in consolidation functionality. Option C is wrong because data integration can import data but does not handle the mapping and elimination required for proper consolidation; the recommended approach is to use the Consolidate with elimination feature.

Answer

Recreate the subsidiary's chart of accounts to match the parent company before consolidation.

Answer

Use the General ledger export process to transfer trial balance data and then manually consolidate.

Answer

Export data from the subsidiary's system and import it into the parent company's Dynamics 365 Finance using data integration.