MB-920 Practice Exam 53 — 20 Questions

Question 1

A Dynamics 365 Finance user needs to create a purchase order and ensure that the budget is checked before the order is confirmed. The company has enabled budget control. What must be configured to enforce budget checking on purchase orders?

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

Accepted Answer

Budget control configuration with the purchase order budget check rule enabled. To enforce budget checking on purchase orders, you must configure budget control to include purchase orders. In the budget control configuration, you enable the budget check rule for the purchase order document type. This ensures that when a purchase order is confirmed, the system validates available budget and blocks or warns if funds are insufficient. Other options do not provide this enforcement.

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Budget register entries for the purchase order amount

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Workflow configuration for purchase order approval

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Procurement categories assigned to the purchase order lines

Question 2

A company uses Dynamics 365 Commerce to manage its retail stores and online channels. The store manager needs to process a customer return for an item purchased online and return the amount to the customer's original payment method. Which Commerce capability should the manager use?

Accepted Answer

Create a return order in the store POS. The store POS in Dynamics 365 Commerce supports creating return orders for items purchased online or in-store, allowing the associate to look up the original transaction and refund to the original payment method. This is the correct capability for processing a customer return in a retail store, as it integrates with Commerce headquarters for seamless returns management.

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Create a credit note in the call center

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Process a refund in the e-commerce checkout

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Issue a gift card in the store POS

Question 3

A company using Dynamics 365 Finance wants to ensure that all purchase orders over $10,000 are automatically routed to the department manager for approval before they can be confirmed. Which feature should the company configure to meet this requirement?

Accepted Answer

Workflow. Workflow is the correct feature because it enables the automation of business processes, including purchase order approvals. By configuring a purchase order workflow with a condition based on the total amount, the system can automatically route purchase orders over $10,000 to the department manager. This ensures compliance with the company's approval policy.

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Vendor collaboration

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Purchase order confirmation

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Budget control

Question 4

A company uses Dynamics 365 Supply Chain Management to manage inventory. They want to use the Inventory turnover ratio to analyze how quickly inventory is sold and replenished. Which two factors are used to calculate this ratio? (Choose two.)

Accepted Answer

Cost of goods sold (COGS). The inventory turnover ratio is calculated as cost of goods sold divided by average inventory. COGS reflects the cost of products sold, while average inventory represents the average stock level over a period. These two factors together measure how efficiently inventory is managed. Other metrics like sales revenue or transaction counts are not used in this specific ratio.

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Number of inventory transactions

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Lead time for replenishment

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Total sales revenue

Question 5

A distribution company uses Dynamics 365 Supply Chain Management to manage inventory across multiple warehouses. They want to track the cost of items using a method that recalculates the average cost each time a receipt is posted, so that inventory value reflects the most current purchase prices. Which inventory costing method should they use?

Accepted Answer

Moving average. Moving average is the inventory costing method that recalculates the item's average cost each time a receipt is posted, ensuring that inventory value reflects the latest purchase prices. This method is commonly used by distributors that want up-to-date cost information without the overhead of standard cost revaluation. It directly fulfills the requirement to track cost based on current receipts.

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FIFO (First In, First Out)

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Standard cost

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LIFO (Last In, First Out)

Question 6

A Dynamics 365 Finance user needs to ensure that a specific vendor invoice is approved by both the department manager and the finance controller before it can be posted. The approval order must be manager first, then controller. Which feature should be configured?

Accepted Answer

Vendor invoice workflow. A vendor invoice workflow is the correct feature because it enables you to define a sequence of approval tasks. You can configure the first approval by the department manager and the second by the finance controller. The invoice cannot be posted until the workflow completes successfully, ensuring the required order and authorization.

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Posting profiles

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Vendor collaboration workspace

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Invoice matching policy

Question 7

A financial controller at a retail company is reviewing how Dynamics 365 Finance handles the sequence of accounting entries that occur when a customer invoice is posted. They want to confirm which framework governs the automatic creation of ledger entries from subledger transactions. Which framework should they identify?

Accepted Answer

The accounting framework. The accounting framework is the core mechanism that maps subledger transactions, such as customer invoices, to general ledger entries using posting types and main accounts. It ensures every subledger document produces balanced double-entry postings. Posting profiles, financial dimensions, and ledger calendars are supporting configurations, but they do not define the fundamental debit and credit generation rules that the controller needs to confirm.

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The financial dimensions framework

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The posting profile framework

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The ledger calendar framework

Question 8

A company uses Dynamics 365 Supply Chain Management with warehouse management. They want to implement a process where suppliers can monitor inventory levels and automatically create replenishment orders based on minimum and maximum thresholds. Which feature should they use?

Accepted Answer

Vendor-managed inventory (VMI). Vendor-managed inventory (VMI) in Dynamics 365 Supply Chain Management is designed for supplier-driven replenishment. Suppliers can monitor inventory levels and automatically create replenishment orders when stock hits minimum thresholds, up to maximum levels. This matches the scenario's requirement. Other features like vendor collaboration or consignment inventory do not provide this automated min/max replenishment capability.

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Vendor collaboration

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Purchase requisition

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Consignment inventory

Question 9

A company uses Dynamics 365 Finance with the Cost accounting module. The cost accountant needs to allocate indirect costs, such as factory rent, to multiple production departments based on the square footage each department occupies. The allocation must be recalculated each month. What should the accountant configure?

Accepted Answer

A cost allocation policy with a statistical dimension for square footage and an allocation base that uses the statistical measure.. Cost allocation policies with statistical dimensions enable dynamic allocation of indirect costs based on a measurable driver like square footage. This ensures that each month the rent is distributed accurately according to current space usage, without manual intervention. Other options either do not allocate costs or rely on static percentages that would require constant updates.

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A cost center hierarchy that includes all production departments and a cost roll-up policy.

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A ledger allocation rule with a basis of 'Percentage' and manually entered percentages for each department.

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A budget control rule that distributes the rent expense across departments based on a fixed percentage.

Question 10

A company uses Dynamics 365 Finance and needs to allocate indirect costs, such as utilities, from a cost center to multiple departments based on a defined percentage. They want the allocation to occur automatically when the original expense is posted. Which feature should they use?

Accepted Answer

Ledger allocation rules. Ledger allocation rules are designed to automatically distribute amounts from a source to destinations using a basis such as percentage. They can be integrated with posting to run automatically. Financial dimensions, budget control, and accrual schemes serve different purposes and do not perform cost allocation, making ledger allocation rules the correct choice.

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Accrual schemes

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Financial dimensions

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Budget control

Question 11

A company uses Dynamics 365 Finance. The controller wants to ensure that all vendor invoices above $10,000 require approval before payment. Which feature should you configure?

Accepted Answer

Accounts payable invoice workflow. The requirement is to enforce approval for vendor invoices above a specified amount. Accounts payable invoice workflows are designed exactly for this: they apply conditional routing so that invoices meeting the $10,000 threshold are sent for approval before posting or payment. Other features address payment generation, procurement confirmation, or budget checking but do not provide amount-based approval routing for invoices.

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Purchase order confirmation

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Budget control configuration

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Vendor payment proposal

Question 12

A company is evaluating Dynamics 365 Finance for its financial management needs. The finance team requires features to manage daily financial transactions and reporting. Which two capabilities are core to Dynamics 365 Finance? (Choose two.)

Accepted Answer

General ledger. The core capabilities of Dynamics 365 Finance include general ledger for recording transactions and producing financial statements, and accounts payable and accounts receivable for managing vendor and customer transactions. These are fundamental modules that support daily financial operations and reporting. Production control and warehouse management belong to Supply Chain Management, and project management is a specialized module.

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Warehouse management

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Project management and accounting

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Production control

Question 13

A multinational company uses Dynamics 365 Finance to manage its financial operations across multiple legal entities. The controller needs to consolidate financial results from all entities into a single consolidated report, ensuring that intercompany transactions are automatically eliminated. Which feature in Dynamics 365 Finance should the controller use?

Accepted Answer

Financial consolidation. The financial consolidation feature in Dynamics 365 Finance is designed to combine financial data from multiple legal entities into a single consolidated entity. It includes the ability to automatically eliminate intercompany transactions, which is essential for accurate consolidated reporting. Consolidation accounts are used within this feature to map accounts, but the overall capability is financial consolidation.

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Financial dimensions

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Consolidation accounts

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Intercompany accounting

Question 14

A company uses Dynamics 365 Supply Chain Management with warehouse management. They need to ensure that when a worker scans an item during picking, the system validates that the item is from the correct location and matches the item number. Which configuration should they use?

Accepted Answer

Work confirmation policies. Work confirmation policies are used to enforce validation during warehouse work execution, such as requiring workers to scan and confirm the item and location. This ensures that the correct item is picked from the correct location, reducing errors. The other options do not provide scan validation during picking.

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Warehouse work policies

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Inventory reservation hierarchy

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Location directives

Question 15

A Dynamics 365 Finance user needs to prevent a purchase order from being confirmed if the total amount exceeds the available budget for the cost center. Which feature should be enabled?

Accepted Answer

Budget control. Budget control is the feature that checks available budget funds before allowing a transaction to proceed. By configuring budget control for purchase orders and specifying the cost center as a budget dimension, the system will verify that the purchase order amount does not exceed the remaining budget. If it does, confirmation is blocked, and the user is alerted.

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Encumbrance accounting

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Budgeting workflows

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Purchase order workflows

Question 16

A company is evaluating Dynamics 365 Finance to manage its core financial operations. They need to understand which capabilities are included in the general ledger module. Which two capabilities are part of the general ledger? (Choose two.)

Accepted Answer

Financial dimensions. The general ledger module in Dynamics 365 Finance includes capabilities such as financial dimensions and budgeting. Financial dimensions allow detailed transaction tagging, and budgeting provides planning and control. Accounts payable, fixed assets, and cash and bank management are separate modules that integrate with the general ledger but are not part of it. Therefore, the correct capabilities are financial dimensions and budgeting.

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Cash and bank management

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Fixed assets

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Accounts payable

Question 17

A specialty food producer uses Dynamics 365 Supply Chain Management. They need to track the shelf life of ingredients and finished goods, and they want the system to automatically assign the earliest expiration date to outgoing inventory to minimize waste. Which inventory management feature should they implement?

Accepted Answer

First expired, first out (FEFO). FEFO is the correct feature because it automatically prioritizes inventory with the earliest expiration date for picking and reservation. This directly addresses the need to minimize waste by ensuring perishable items are shipped before they expire, unlike FIFO or LIFO which rely on receipt dates.

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Last in, first out (LIFO)

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Batch disposition codes

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First in, first out (FIFO)

Question 18

A beverage distributor uses Dynamics 365 Supply Chain Management. They want to reduce manual effort when shipping to retail customers who send electronic purchase orders and expect advance ship notices. Which two capabilities support this? (Choose two.)

Accepted Answer

Electronic data interchange (EDI) integration. Electronic data interchange integration automates the exchange of purchase orders and advance ship notices with retail trading partners, while transportation management supplies the load, carrier, and shipment data needed for outbound shipping and notification. Together they remove manual order entry and document preparation for customers who transact electronically.

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Expense management

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Product information management

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Fixed asset leasing

Question 19

A company is implementing Dynamics 365 Finance and wants to use financial dimensions to track transactions by department and cost center across all legal entities. They need to understand which statements about financial dimensions are correct. (Choose two.)

Accepted Answer

Financial dimensions can be used in account structures to define valid account and dimension combinations.. Financial dimensions are shared across legal entities and can be incorporated into account structures to define valid combinations for posting. These two statements correctly describe how dimensions support cross-entity tracking of department and cost center. The other statements are false because dimensions do not replace the chart of accounts, are not limited to a single legal entity, and are used in transaction entry, not only for reporting.

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Financial dimensions are always limited to a single legal entity.

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Financial dimensions can be used only for reporting and not for transaction entry.

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Financial dimensions replace the need for a chart of accounts.

Question 20

A company using Dynamics 365 Finance wants to record all financial transactions in multiple currencies and automatically calculate exchange rate gains and losses. Which feature should they configure?

Accepted Answer

Currency exchange rate types and currency pairs. To record transactions in multiple currencies and automatically calculate exchange rate gains and losses, you must configure currency exchange rate types and currency pairs. These settings define the rates used when converting foreign currency transactions to the accounting currency and enable the system to compute realized and unrealized gains/losses during settlement or revaluation.

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Advanced ledger entries

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Financial dimensions

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Ledger allocation rules