MB-920 Practice Test 50 — 15 Questions

Question 1

Your organization is implementing Dynamics 365 Finance and needs to manage the financial operations of multiple legal entities. Which module is the primary tool for recording and managing financial transactions for each legal entity?

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

Accepted Answer

General ledger. The General ledger is the core module for recording all financial transactions for each legal entity. Option A (Accounts payable) manages vendor invoices and payments. Option B (Accounts receivable) manages customer invoices and receipts. Option D (Budgeting) is for budget planning and control.

Answer

Accounts payable

Answer

Accounts receivable

Answer

Budgeting

Question 2

Which THREE features are available in Dynamics 365 Finance to support compliance with International Financial Reporting Standards (IFRS)?

Accepted Answer

Revenue recognition schedules for deferred revenue. Options A, B, and C are correct. Dynamics 365 Finance supports revenue recognition schedules (A) for deferred revenue under IFRS 15, multi-currency accounting with exchange rate adjustments (B) for IAS 21, and depreciation profiles (C) for IAS 16. Option D (vendor collaboration portal) is a procurement feature unrelated to IFRS compliance. Option E (budget control) is for internal management, not external financial reporting standards.

Answer

Vendor collaboration portal

Answer

Budget control for expenditure limits

Question 3

A company uses Dynamics 365 Finance and needs to track the financial performance of individual projects. Costs for materials, labor, and overhead must be recorded against each project. Which module should be used to manage this?

Accepted Answer

Project management and accounting. The Project management and accounting module is specifically designed to track project costs and revenues, including materials, labor, and overhead. Option A is wrong because Procurement and sourcing handles purchasing and vendor management. Option B is wrong because Production control is for manufacturing operations. Option D is wrong because Fixed assets manages asset depreciation and lifecycle.

Answer

Procurement and sourcing

Answer

Production control

Answer

Fixed assets

Question 4

Which TWO features in Dynamics 365 Finance support compliance with regulatory reporting requirements for financial statements?

Accepted Answer

Electronic reporting. Options C and E are correct because Electronic reporting allows configuring tax and financial reports per regulatory formats, and Financial reporting enables designing reports compliant with GAAP/IFRS. Option A is incorrect because Budget control is for monitoring budgets, not reporting. Option B is incorrect because Intercompany accounting is for internal transactions. Option D is incorrect because Fixed assets management is for asset tracking, not reporting.

Answer

Budget control

Answer

Intercompany accounting

Answer

Fixed assets management

Question 5

A company uses Dynamics 365 Finance with budget control enabled. They notice that budget funds are not being consumed when a purchase requisition is approved. The budget check is configured to occur on journal approval. What is the most likely cause?

Accepted Answer

The budget check is not configured for purchase requisitions. Budget control must be set to check at the purchase requisition stage. Since budget check is configured for journal approval, it does not occur when the requisition is approved, so funds are not consumed. Option A is wrong because budget thresholds affect warnings, not consumption timing. Option B is wrong because document level determines when the check occurs, but the question specifies it is set to purchase order, which is later than requisition. Option C is wrong because the budget source being incorrect would cause other issues, not the lack of consumption at requisition approval.

Answer

Budget thresholds are set too high

Answer

The document level is set to purchase order

Answer

The budget source is incorrect

Question 6

A company uses Dynamics 365 Supply Chain Management and wants to integrate with an external transportation management system (TMS) to get real-time shipping rates. Which integration approach should they use?

Accepted Answer

Configure the transportation management module to use rate shopping. The transportation management module in Dynamics 365 Supply Chain Management includes built-in rate shopping functionality that can integrate with external TMS providers to retrieve real-time shipping rates. This feature uses rate route workbenches and rate engines to compare rates from multiple carriers dynamically, making it the native and intended approach for real-time rate integration.

Answer

Use OData endpoints to expose carrier data

Answer

Use Power Automate to call a third-party API

Answer

Use data entities to import rates from a flat file

Question 7

A company uses Dynamics 365 Finance and wants to implement a three-way matching policy for purchase invoices. Which TWO components are required for three-way matching?

Accepted Answer

Product receipt.. Three-way matching in Dynamics 365 Finance compares the purchase order, product receipt, and vendor invoice. Options B (Product receipt) and C (Purchase order) are the two components required for three-way matching, along with the vendor invoice. Option A (Vendor invoice) is the third component, not one of the two required in addition to itself. Therefore, A is incorrect. Option D (Packing slip) is not used in three-way matching, and Option E (General journal entry) is unrelated.

Answer

Vendor invoice.

Answer

Packing slip.

Answer

General journal entry.

Question 8

A retail company uses Dynamics 365 Finance to process customer payments. The accounts receivable clerk receives a payment from a customer that partially pays an invoice. The clerk wants to apply the payment to the oldest invoice first. Which feature should the clerk use?

Accepted Answer

Use the settlement functionality in the customer payment journal.. Settlement functionality in the customer payment journal allows the clerk to apply a partial payment to a specific invoice, such as the oldest one. Option A is incorrect because the collections process is used for managing overdue accounts, not for applying payments. Option B is incorrect because credit and collections parameters can auto-apply payments, but that is not the specific feature the clerk needs to manually apply to the oldest invoice. Option C is incorrect because a payment schedule is for installment payments, not for applying a single partial payment to an existing invoice.

Answer

Run the collections process to identify the oldest invoice.

Answer

Configure the credit and collections parameters to auto-apply payments.

Answer

Create a payment schedule for the customer.

Question 9

A multinational organization uses Dynamics 365 Finance with multiple currencies. They need to comply with local accounting standards that require revaluation of foreign currency balances at month-end. Which THREE actions should be performed?

Accepted Answer

Run Accounts payable foreign currency revaluation. General ledger foreign currency revaluation adjusts account balances for exchange rate fluctuations. Accounts payable and accounts receivable foreign currency revaluation adjust vendor and customer balances, respectively. Reporting currency translation is used for converting financial statements to a reporting currency, not for revaluation. Therefore, the correct three actions are: Run Accounts payable foreign currency revaluation (A), Run General ledger foreign currency revaluation (C), and Run Accounts receivable foreign currency revaluation (D).

Answer

Run Reporting currency translation

Answer

Run Exchange rate adjustment

Question 10

A company uses Dynamics 365 Finance for financial management. The CFO wants to use AI to predict customer payment delays and recommend proactive actions. Which feature should you use?

Accepted Answer

Customer payment predictions. Dynamics 365 Finance includes AI-driven customer payment predictions that provide insights and recommendations for proactive actions. Option B is wrong because cash flow forecasting focuses on projecting cash inflows and outflows, not specifically predicting payment delays. Option C is wrong because Microsoft Copilot in Finance is for conversational assistance and does not specialize in payment predictions. Option D is wrong because budgeting and planning is for creating and managing budgets, not predicting payment delays.

Answer

Cash flow forecasting

Answer

Microsoft Copilot in Finance

Answer

Budgeting and planning

Question 11

A company uses Dynamics 365 Finance to manage asset lifecycle. They want to track maintenance costs and schedule preventive maintenance. Which TWO modules should be used?

Accepted Answer

Asset management. Asset management (C) is used to track maintenance, repairs, and schedule preventive maintenance for assets. Fixed assets (E) manages the financial tracking, depreciation, and lifecycle of assets. Budgeting (A) is for financial planning and not for maintenance tracking. Procurement and sourcing (B) handles purchasing and vendor management, not maintenance. Project management and accounting (D) is for project-based work, not asset maintenance. Therefore, the correct modules are Asset management and Fixed assets.

Answer

Budgeting

Answer

Procurement and sourcing

Answer

Project management and accounting

Question 12

A company uses Dynamics 365 Supply Chain Management to manage its supply chain. They need to forecast demand for the next quarter to plan procurement and production. Which module should they use for demand forecasting?

Accepted Answer

Master planning. Master planning in Dynamics 365 Supply Chain Management is the module specifically designed for demand forecasting. It uses historical data and statistical methods to generate forecasts that drive procurement and production planning. The other modules handle execution or sales tracking, not the forecasting engine.

Answer

Procurement and sourcing

Answer

Production control

Answer

Sales and marketing

Question 13

You are a Dynamics 365 Finance administrator for a company that needs to manage fixed assets. The company purchases assets frequently and wants to automate the creation of fixed assets from purchase orders. When a purchase order for a fixed asset is invoiced, the system should automatically create a fixed asset record and post the acquisition cost. What should you configure?

Accepted Answer

On the purchase order line, set the 'Fixed asset acquisition' type, and enable automatic fixed asset creation in Fixed assets parameters.. Setting the 'Fixed asset acquisition' type on purchase lines and enabling automatic creation in Fixed assets parameters automates asset creation from purchase orders. Option B is wrong because the asset inventory module is for tracking, not financial acquisition. Option C is wrong because manual creation is not automated. Option D is wrong because integration with Asset Management is not for financial acquisition.

Answer

Use the asset inventory module to track assets and post acquisition costs to a general ledger account.

Answer

Create fixed assets manually from the Fixed assets module and post the acquisition using a fixed asset journal.

Answer

Set up integration between Dynamics 365 Finance and Dynamics 365 Asset Management to automatically create assets.

Question 14

You are the finance systems manager for a large manufacturing conglomerate using Dynamics 365 Finance. The company has multiple legal entities, each with its own chart of accounts. The CFO wants to consolidate financial results across all entities at month-end. The consolidation must eliminate intercompany transactions and adjust for differences in accounting standards (e.g., US GAAP vs IFRS). You need to design the consolidation process. What should you do?

Accepted Answer

Set up a consolidation company, configure elimination rules, and use currency translation to convert to the parent's reporting currency. Also, set up additional reporting currencies for IFRS adjustments.. It involves setting up a consolidation company, configuring elimination rules to automatically eliminate intercompany transactions, and using currency translation to convert to the parent's reporting currency. Additionally, setting up additional reporting currencies allows for adjustments between US GAAP and IFRS. Option A is wrong because simply creating a consolidation company and running consolidation does not automatically handle elimination rules or multi-GAAP adjustments. Option C is wrong because manual export/import is not automated and is error-prone. Option D is wrong because reporting currencies in each legal entity are used for single-entity reporting, not for consolidation-level multi-GAAP adjustments; Management Reporter is for reporting, not for the consolidation process itself.

Answer

Create a consolidation company and run the consolidation process, which automatically eliminates intercompany transactions.

Answer

Export each entity's trial balance to Excel, manually adjust for intercompany transactions, and import into a consolidation company.

Answer

Set up reporting currencies in each legal entity to report in both GAAP and IFRS, and use Management Reporter for consolidation.

Question 15

A Dynamics 365 Finance administrator needs to restrict a user from posting in a specific period that is not yet closed. The user should still be able to enter transactions. What configuration should the administrator use?

Accepted Answer

Ledger period status. (Ledger period status) is correct because it allows an administrator to set a period's status to 'On hold' for a specific user or group, preventing posting while still permitting transaction entry. Option A (Period close) is incorrect because it finalizes the period, preventing both entry and posting. Options C and D are unrelated to user posting permissions.

Answer

Period close

Answer

Fiscal calendar setup

Answer

Audit policies