MB-920 Practice Exam 51 — 20 Questions

Question 1

A distribution company uses Dynamics 365 Supply Chain Management. They notice that the cost of goods sold (COGS) is being incorrectly calculated for certain items. The items are set up with a costing method of 'FIFO' and the inventory model is 'FIFO with physical value'. The issue occurs when purchase orders are received but not yet invoiced. What is the most likely cause of the incorrect COGS calculation?

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

Accepted Answer

The physical receipt cost differs from the final invoice cost. In a FIFO costing method with 'FIFO with physical value' model, COGS is calculated based on the physical receipt cost until the invoice is posted. If the physical receipt cost differs from the final invoice cost, the COGS will be temporarily incorrect until the invoice is updated. Option A is incorrect because running inventory close would correct costs after invoicing, but the issue here is a timing difference before invoicing. Option B is incorrect because standard cost is a different costing method not related to the FIFO setup. Option D is incorrect because 'FIFO with financial value' would change when costs are updated, but the current model 'FIFO with physical value' is appropriate for the described behavior.

Answer

The inventory close process has not been run

Answer

The costing method should be 'Standard cost'

Answer

The inventory model should be 'FIFO with financial value'

Question 2

Refer to the exhibit. A purchase order line shows a LineDiscount of 10.0 and LineAmount of 225.00. If the discount is applied as a percentage, what is the correct interpretation?

Accepted Answer

The line discount is a 10% discount on the line total. The LineDiscount of 10.0 is interpreted as a percentage (10%) when the discount method is set to percentage. This means the line discount is calculated as 10% of the line total, resulting in a LineAmount of 225.00 after the discount is applied. In Dynamics 365 Finance and Operations, the LineDiscount field stores the discount value, and its interpretation depends on the discount method selected on the purchase order line.

Answer

The line discount is applied after line amount calculation

Answer

The line discount is a flat $10.00 reduction

Answer

The line discount is 10% of the unit price

Question 3

A company wants to share product data across multiple Dynamics 365 Finance legal entities. What should be used?

Accepted Answer

Shared product master. The Shared product master (B) is the correct feature because it allows product data to be defined once and shared across multiple Dynamics 365 Finance legal entities. This ensures consistent product information, such as item numbers, descriptions, and dimensions, is synchronized without duplication, which is essential for multi-entity organizations.

Answer

Purchase agreements

Answer

Inventory journal

Answer

Sales orders

Question 4

You are a Dynamics 365 Supply Chain Management functional consultant for a food and beverage company. The company receives raw materials from multiple suppliers and needs to enforce quality inspections on all inbound shipments of dairy products. If a dairy shipment fails inspection, the entire lot must be quarantined and cannot be used in production. Additionally, the company wants to automatically generate purchase orders when the inventory level of a key ingredient falls below a reorder point. The inventory planner will review and approve the suggested orders before they are sent to suppliers. You need to configure the system to: (1) enforce quality inspections on inbound dairy products; (2) automatically quarantine failed lots; (3) generate purchase order suggestions based on reorder points. What should you do?

Accepted Answer

Use quality orders with a sampling plan for dairy products and set inventory status to 'Quarantine' on failure. Set up item coverage with a reorder point and run master planning to generate planned purchase orders.. To enforce quality inspections on inbound dairy products, you need to create quality orders with a sampling plan specific to dairy items. When a quality order fails, you can configure the inventory status to be updated to 'Quarantine', which blocks the lot from being used in production. For automatic purchase order generation based on reorder points, you set up item coverage for the key ingredient with a reorder point and run master planning. Master planning will generate planned purchase orders when the projected inventory falls below the reorder point. The inventory planner can then review and approve these planned orders before they are converted to actual purchase orders. Option B correctly combines quality orders with sampling and quarantine status for inspections, and item coverage with master planning for purchase order suggestions. Option A is incorrect because the safety stock journal does not automatically generate purchase orders based on reorder points; it is a manual adjustment. Option C uses vendor evaluation, which is not the correct tool for inbound quality inspections on specific items. Option D uses cycle counting, which is for inventory accuracy, not quality inspections.

Answer

Create a quality order for each inbound dairy shipment and configure a workflow to approve or reject. Use safety stock journal to create purchase orders when stock is low.

Answer

Set up vendor evaluation to inspect dairy suppliers and use inventory blocking to quarantine. Configure master planning with safety stock for automatic purchase orders.

Answer

Create a cycle counting plan for dairy products and set up a quarantine zone in the warehouse. Configure item coverage with a min-max system for automatic purchase orders.

Question 5

A company uses Dynamics 365 Human Resources. They need to automate the process of sending onboarding tasks to new employees based on their start date. Which feature should they configure?

Accepted Answer

Personnel actions workflow. Personnel actions workflows in Dynamics 365 Human Resources allow you to automate business processes, such as sending onboarding tasks to new employees based on their start date. By configuring a personnel action workflow, you can define conditions (e.g., start date) that trigger specific actions, including the assignment of onboarding checklists and tasks. This directly meets the requirement for automated task distribution.

Answer

Employee self-service goals

Answer

Position hierarchies

Answer

Checklist templates

Question 6

Refer to the exhibit. A journal entry in Dynamics 365 Finance shows a debit to account 1100-001-01 and offset to account 2100-002-02. The financial dimensions include Department=Sales and CostCenter=CC001. What is the purpose of this entry?

Accepted Answer

Increasing cash and increasing a liability. The entry debits Cash (account 1100, an asset) and credits Accounts Payable (account 2100, a liability). A debit increases Cash, and a credit increases Accounts Payable. This results in both an increase in cash and an increase in a liability, which matches option C. Such an entry could represent receiving a deposit or a loan, where the company receives cash and incurs a liability to repay.

Answer

Recording a customer payment

Answer

Recording a vendor payment

Answer

Reclassifying a bank transaction

Question 7

A company uses Dynamics 365 Project Operations to manage projects. They need to track project budgets and actual costs in real-time. Which core capability should they use?

Accepted Answer

Project cost management. Project cost management in Dynamics 365 Project Operations provides real-time tracking of budgets versus actual costs by integrating cost estimates, actual transactions, and budget controls. This capability enables project managers to monitor cost performance continuously and receive alerts when costs exceed thresholds, ensuring financial control throughout the project lifecycle.

Answer

Resource management

Answer

Time and expense management

Answer

Project accounting

Question 8

A Dynamics 365 Sales user runs a FetchXML query similar to the exhibit to retrieve accounts. The query returns fewer results than expected. The user expects to see accounts from Seattle with revenue over $1,000,000, but some accounts meeting these criteria are missing. What is the most likely cause?

Accepted Answer

The revenue condition uses 'gt' instead of 'ge', so accounts with exactly $1,000,000 are excluded. The FetchXML query uses 'gt' (greater than) for the revenue condition, which excludes accounts with revenue exactly $1,000,000. The user expects accounts with revenue over $1,000,000, but 'gt' is strictly greater than, so accounts with revenue equal to $1,000,000 are omitted. Changing the operator to 'ge' (greater than or equal to) would include those accounts, resolving the discrepancy.

Answer

The filter type should be 'or' to include all Seattle accounts regardless of revenue

Answer

The order attribute is incorrect, causing some records to be hidden

Answer

The entity name is misspelled as 'account' instead of 'accounts'

Question 9

Match each Dynamics 365 Human Resources capability to its definition.

Accepted Answer

Leave and absence management: Manage employee time off requests, track accruals, and handle absence approvals.. These are core HR capabilities in Dynamics 365 Human Resources. Common confusions include swapping leave and absence management with compensation management, or benefits management with personnel management.

Answer

Compensation management: Manage employee time off requests and absence tracking.

Answer

Personnel management: Administer employee benefit plans and enrollments.

Question 10

A logistics company wants to use Dynamics 365 Supply Chain Management to track transportation costs and optimize routing. Which module should they implement?

Accepted Answer

Transportation management. Transportation management in Dynamics 365 Supply Chain Management handles freight, routing, and cost optimization. Option A (Sales and marketing) is wrong because it focuses on customer orders and sales processes, not transportation costs. Option C (Warehouse management) is wrong because it deals with inbound/outbound warehouse operations, not transportation. Option D (Procurement and sourcing) is wrong because it manages purchasing and supplier relationships, not transportation.

Answer

Sales and marketing

Answer

Warehouse management

Answer

Procurement and sourcing

Question 11

A company uses Dynamics 365 Finance. The accounting team needs to create a financial report that shows actual vs. budgeted expenses by department. Which THREE components must be configured?

Accepted Answer

Financial dimension sets. Financial dimension sets (A) are required because they define the combination of dimensions (e.g., Department, Cost Center) used to segment actual and budget data in reports. Main accounts (B) are the core accounts from the chart of accounts that capture the expense values. A budget model (C) is necessary because it holds the budget amounts for each account and dimension combination, enabling the actual vs. budget comparison.

Answer

Chart of accounts

Answer

Fixed asset group

Question 12

A company uses Dynamics 365 Supply Chain Management with the Asset Management module. They need to create a maintenance plan that generates work orders based on meter readings (e.g., after every 100 operating hours). Which schedule type should they use?

Accepted Answer

Meter. 'Meter' because this schedule type is specifically designed to trigger work orders based on counter readings such as operating hours. Option A (Counter) is incorrect because 'Counter' is not a schedule type in Asset Management; the correct term is 'Meter'. Option C (Interval) is incorrect because 'Interval' is a schedule type based on fixed elapsed time (e.g., every 7 days), not on meter readings. Option D (Time) is incorrect because 'Time' is a schedule type that uses fixed time intervals, not meter readings.

Answer

Counter

Answer

Interval

Answer

Time

Question 13

An organization uses Dynamics 365 Finance. The finance team notices that the 'Purchase order' workflow is not triggering correctly for certain vendors. They suspect it's due to conditions in the workflow configuration. Where should they diagnose the workflow condition logic?

Accepted Answer

Purchase order workflow editor. Purchase order workflow editor. Workflow configuration, including conditions, is reviewed and edited within the workflow editor in Dynamics 365 Finance. Option A (Power Automate flows) is incorrect because Power Automate is used for external automation, not for native Dynamics 365 workflows. Option B (System administration parameters) is incorrect as it deals with system-wide settings, not specific workflow logic. Option D (Vendor master form) is incorrect because the vendor master does not contain workflow configuration details.

Answer

Power Automate flows

Answer

System administration parameters

Answer

Vendor master form

Question 14

Refer to the exhibit. An organization in Dynamics 365 Finance has defined financial dimensions as shown. What is the total length of the account structure for a journal entry?

Accepted Answer

14. The account structure comprises the main account (length 6), department (length 3), and cost center (length 5), totaling 14 (6+3+5=14). Option B (15) is incorrect because it adds an extra character. Option C (11) is incorrect because it likely omits the main account or miscalculates. Option D (8) is incorrect because it only accounts for two segments.

Answer

15

Answer

11

Answer

8

Question 15

You are the finance manager for a company that uses Dynamics 365 Finance. The company has a requirement to process recurring invoices for subscription services. The finance team wants to automate the generation of recurring invoices at the beginning of each month. The recurring invoices should be based on a template that includes predefined line items and amounts. You need to configure the system to automate this process. What should you do?

Accepted Answer

Create a recurring invoice template with the subscription items, and set up a recurring invoice batch job to generate invoices on the first day of each month.. Recurring invoice templates with subscription items can be used with the 'Generate recurring invoices' batch job to create invoices on a schedule. Option A is incorrect because credit note templates are for issuing credit notes, not invoices. Option B is incorrect because free text invoice templates are for one-off charges, not recurring subscriptions. Option D is incorrect because sales order templates are for physical goods, not subscription services.

Answer

Create a credit note template and use the 'Generate recurring credit notes' batch job to offset invoices.

Answer

Create free text invoice templates and use the 'Generate recurring invoices' batch job to create them on a schedule.

Answer

Create sales order templates and use the 'Create recurring orders' batch job to generate sales orders each month.

Question 16

A company uses Dynamics 365 Supply Chain Management and wants to implement a vendor-managed inventory (VMI) process where vendors monitor and replenish stock at the customer's warehouse. What is the recommended setup?

Accepted Answer

Set up consignment inventory for the vendor. Vendor-managed inventory (VMI) in Dynamics 365 Supply Chain Management is implemented using consignment inventory. In a consignment setup, the vendor owns the stock until it is consumed or transferred to the customer's inventory, which aligns with the VMI process where the vendor monitors and replenishes stock at the customer's warehouse. The system supports this through consignment replenishment orders and vendor-owned inventory tracking.

Answer

Configure warehouse management for the vendor

Answer

Enable quality management for received items

Answer

Create a purchase agreement with the vendor

Question 17

A manufacturing company uses Dynamics 365 Supply Chain Management. They notice that the inventory valuation for a specific item is inconsistent between the financial and operational reports. The item uses FIFO costing. What could be the most likely cause of this discrepancy?

Accepted Answer

The inventory close process has not been run for the period.. The inventory close process recalculates cost of goods sold and adjusts inventory values for FIFO costing, ensuring consistency between financial and operational reports. Option A is incorrect because batch attributes are used for quality tracking and traceability, not inventory valuation. Option B is incorrect because an inventory status of 'Blocked' prevents transactions but does not affect the valuation calculation itself. Option D is incorrect because inventory recalculation is primarily for average cost methods, not FIFO; FIFO relies on the inventory close process to correct valuations.

Answer

The item has batch attributes configured.

Answer

The item's inventory status is set to 'Blocked'.

Answer

The inventory recalculation was run incorrectly.

Question 18

During a system audit, you discover that a warehouse worker has been able to pick inventory that was reserved for another order. Which configuration change should you recommend to prevent this issue?

Accepted Answer

Configure the inventory reservation hierarchy to enforce reservation against physical supply.. Inventory reservation hierarchy determines the order of reservation against supply. If not properly configured, workers can pick reserved stock. Location directives guide picking but don't enforce reservation. Wave processing is for batch picking. Inventory status controls availability but not reservation enforcement.

Answer

Enable wave processing to create picks only for unreserved inventory.

Answer

Set up location directives to restrict picking from reserved locations.

Answer

Change inventory status to 'Quarantine' for reserved items.

Question 19

You are the Dynamics 365 Finance administrator for a manufacturing company with multiple legal entities. The company uses intercompany transactions between Entity A (US) and Entity B (Germany). Entity A sells raw materials to Entity B. The transactions must be recorded in both entities' ledgers, and the intracompany trade must be eliminated during consolidation. Recently, the accounting team reported that intercompany transactions are not being eliminated correctly. Upon investigation, you find that the intercompany transactions were posted using separate purchase orders and sales orders, not through the intercompany module. The elimination process uses intercompany eliminations rules. What should you do to ensure proper elimination?

Accepted Answer

Recreate the transactions using the intercompany module and delete the original orders.. The intercompany module in Dynamics 365 Finance is specifically designed to automatically generate matching transactions in both legal entities and to flag those transactions for elimination during consolidation. By recreating the transactions through the intercompany module, you ensure that the intercompany eliminations rules can correctly identify and eliminate the intercompany trade. Deleting the original orders removes the manually created purchase and sales orders that were not linked to the elimination process.

Answer

Reverse the existing transactions and repost them with the same method.

Answer

Create manual elimination journal entries to correct the balances.

Answer

Adjust the elimination rules to match the existing transactions.

Question 20

A company wants to automatically create purchase orders when inventory for a specific item drops below a predefined level. Which master planning concept should be used?

Accepted Answer

Reorder point. In Dynamics 365 Supply Chain Management, the reorder point concept is used to automatically trigger purchase orders when inventory drops below a predefined level. The reorder point is a specific inventory level that signals the need for replenishment. Master planning monitors inventory levels and generates planned purchase orders when the reorder point is reached. Safety stock, on the other hand, is an additional buffer quantity meant to protect against stockouts due to variability, not the primary trigger for replenishment. Coverage groups define planning parameters like time fences and replenishment strategies, but not the specific trigger level. Forecast models are used for demand forecasting, not for inventory replenishment triggers.

Answer

Safety stock

Answer

Coverage group

Answer

Forecast model