MB-920 Practice Test 6 — 10 Questions

Question 1

An organization needs to track the budget versus actual expenses for each department in real time. Which Dynamics 365 Finance feature should be used?

Accepted Answer

Budget control. Budget control in Dynamics 365 Finance is specifically designed to monitor budget versus actual expenses in real time. It checks whether budget funds are available before allowing a transaction to be posted, providing immediate feedback and preventing overspending.

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Budget planning

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General ledger

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Financial reports

Question 2

A company uses Dynamics 365 Finance and Operations. They need to set up financial dimensions for cost centers and departments. Which TWO statements about financial dimensions are correct?

Accepted Answer

Financial dimensions are linked to main accounts.. Financial dimensions are linked to main accounts to provide additional segmentation and analytical capabilities in Dynamics 365 Finance and Operations. This linkage allows transactions to be tracked and reported across multiple dimensions, such as cost centers and departments, enabling detailed financial analysis and compliance.

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Financial dimensions are automatically derived from vendor master.

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Financial dimensions are used only in the chart of accounts.

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Financial dimensions cannot be used with advanced rules.

Question 3

A company uses Dynamics 365 Human Resources (HR) and wants to ensure that new employees are automatically assigned to the correct compensation plan based on their job and department. What must be configured?

Accepted Answer

Define eligibility rules in the compensation plan to automatically assign based on job and department. In Dynamics 365 Human Resources, eligibility rules within a compensation plan define the criteria (such as job and department) that automatically assign employees to the correct plan upon hire. This ensures that the system evaluates the employee's attributes and applies the appropriate compensation structure without manual intervention, leveraging the built-in eligibility engine.

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Implement a hiring workflow that triggers an email to HR to manually assign the compensation plan

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Set up a compensation structure for each position individually

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Configure the employee self-service portal to allow managers to assign compensation plans

Question 4

A company wants to use Dynamics 365 Supply Chain Management to manage product versions and engineering changes. Which module should they use?

Accepted Answer

Engineering Change Management. Engineering Change Management is the correct module because it is specifically designed to manage product versions, engineering changes, and the associated approval workflows in Dynamics 365 Supply Chain Management. It provides controlled revision control, bill of materials (BOM) versioning, and route versioning, enabling companies to track and implement changes from engineering through production.

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Inventory management

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Product information management

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Procurement and sourcing

Question 5

A multinational organization uses Dynamics 365 Finance. They need to consolidate financial data from subsidiaries that use different currencies and accounting standards. The consolidation must be performed automatically on a monthly basis. What should they configure?

Accepted Answer

Consolidation and currency translation. Consolidation and currency translation in Dynamics 365 Finance is the feature that aggregates subsidiary financials into a parent entity while translating amounts from foreign currencies using defined exchange rates. It supports automated monthly runs via batch jobs and can handle differing accounting standards through account mapping. This directly matches the requirement for automatic monthly consolidation across currencies.

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Fixed assets management

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Intercompany accounting

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Budget planning

Question 6

A company is configuring Dynamics 365 Finance for a new subsidiary. The subsidiary uses a different currency than the parent company. What must be set up to enable translation of the subsidiary's financial statements to the parent's reporting currency?

Accepted Answer

Exchange rates. To translate a subsidiary's financial statements from its local currency to the parent company's reporting currency, Dynamics 365 Finance requires exchange rates to be set up. Exchange rates define the conversion factors between currencies and are essential for currency translation, revaluation, and reporting. Without exchange rates, the system cannot perform the necessary conversions.

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Currency revaluation

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Consolidation company

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Intercompany accounting

Question 7

Refer to the exhibit. A financial analyst needs to post an expense to the Research & Development cost center. They attempt to use the value 'R&D001' but the system does not accept it. The dimension value shown in the exhibit is the only valid value for R&D. What is the most likely reason the entry fails?

Accepted Answer

The dimension value must match 'CC001' exactly.. In Dynamics 365 Finance, financial dimension values are stored and validated by their exact value ID, not by a friendly description or name. The exhibit shows the only valid value for the R&D cost center is 'CC001', so entering 'R&D001' fails validation because it does not match any dimension value in the CostCenter dimension.

Answer

The dimension description must be entered instead of the value.

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The dimension name must be included in the value.

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Cost centers are not financial dimensions; they are separate.

Question 8

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?

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.

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

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

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

Question 9

A company uses the master plan configuration shown in the exhibit. What is the effect of setting IncludeDemandForecast to true?

Accepted Answer

The master plan will consider both forecasted demand and existing sales orders. When IncludeDemandForecast is set to true in the master plan configuration, the master planning engine in Dynamics 365 Supply Chain Management combines forecasted demand with existing sales orders to generate a comprehensive supply plan. This ensures that both confirmed customer orders and predicted future demand are considered, preventing under- or over-stocking.

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The master plan will calculate capacity requirements based on forecast

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The master plan will only consider forecasted demand and ignore sales orders

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The master plan will require manual input of forecast data

Question 10

Refer to the exhibit. A production order in Dynamics 365 Supply Chain Management has Reservation set to 'Manual'. What does this mean for material availability?

Accepted Answer

Materials must be manually reserved by the user. When the Reservation field on a production order is set to 'Manual', materials are not automatically reserved or consumed. Instead, the user must explicitly reserve materials (e.g., via the production order's 'Reserve' action) before or during production. This ensures that material availability is controlled manually, preventing automatic allocation from inventory.

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Materials are automatically reserved when the order is released

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Materials are automatically consumed during production

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Materials are reserved based on the BOM explosion date