MB-920 Practice Test 8 — 10 Questions

Question 1

Your organization is implementing Dynamics 365 Finance. They need to ensure that financial transactions comply with local regulatory requirements for electronic invoicing. Which feature should they use?

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

Accepted Answer

Electronic reporting (ER). Electronic reporting (ER) in Dynamics 365 Finance is a configurable tool that supports the creation and management of electronic documents, including invoices, for regulatory compliance. It allows organizations to define formats that meet local e-invoicing requirements without custom code, and it supports multiple countries and formats. This makes it the correct feature for ensuring financial transactions comply with local electronic invoicing regulations.

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Payment formats

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Financial reporting

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Data management

Question 2

A company uses Dynamics 365 Supply Chain Management. They want to ensure that when a purchase order is received, the system automatically creates a quality order for inspection. Which configuration is required?

Accepted Answer

Set up a quality association for purchase order product receipt. In Dynamics 365 Supply Chain Management, automatic quality order creation on receipt is driven by a quality association that links an item (or item group) to a test group and specifies the document type and reference — here, Purchase order product receipt. When the receipt is posted, the association triggers creation of the quality order for inspection. This is the standard configuration path in the Quality management module.

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Set inventory status to blocking

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Configure nonconformance management

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Define item sampling for the product

Question 3

A company uses Dynamics 365 Project Operations to manage projects. A project manager needs to view the overall health of all active projects in the organization. Which dashboard should the manager use?

Accepted Answer

Project Manager dashboard. The Project Manager dashboard in Dynamics 365 Project Operations is specifically designed to provide a consolidated view of project health metrics, including schedule variance, cost variance, and overall status across all active projects. This dashboard uses built-in Power BI reports to aggregate data from project plans, actuals, and forecasts, enabling the project manager to quickly assess which projects are on track, at risk, or behind schedule.

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Sales dashboard

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Time Entry dashboard

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Resource Manager dashboard

Question 4

A company uses Dynamics 365 Finance to manage its budget. The finance team wants to prevent users from posting expenses that exceed the available budget. Which budget control configuration is required?

Accepted Answer

Budget control configuration. Budget control configuration enables checking against budget. Budget plans are for planning. Budget register entries are for recording. Budget model is a structure.

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Budget plan

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Budget model

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Budget register entry

Question 5

A manufacturing company uses Dynamics 365 Finance to manage its financial operations. The finance team needs to automate the reconciliation of bank transactions with general ledger entries. Which feature should they use?

Accepted Answer

Advanced bank reconciliation. Advanced bank reconciliation allows automatic matching of bank statements with ledger transactions. Option A is wrong because budget control manages budgets, not reconciliation. Option B is wrong because intercompany accounting handles transactions between legal entities. Option D is wrong because cash flow forecasting predicts future cash positions.

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Budget control

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Intercompany accounting

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Cash flow forecasting

Question 6

You are the system administrator for Contoso Ltd., a multinational manufacturing company implementing Dynamics 365 Finance. The company has three legal entities: Contoso US (functional currency USD), Contoso Germany (EUR), and Contoso Japan (JPY). The CFO requires that all purchase orders for raw materials be centrally managed from Contoso US, but the goods must be received directly at each legal entity's warehouse. Additionally, the CFO wants to ensure that intercompany transactions are automatically posted and eliminated during month-end consolidation. You need to configure the system to meet these requirements. What should you do?

Accepted Answer

Configure intercompany purchase orders with direct delivery from Contoso US to the other entities, and set up intercompany elimination rules for consolidation.. Configuring intercompany purchase orders with direct delivery allows Contoso US to centrally manage purchasing while goods are received directly at each legal entity's warehouse. Setting up intercompany elimination rules ensures automatic elimination of intercompany transactions during consolidation, meeting the CFO's requirements. Option A is wrong because separate purchase orders and manual journals do not automate centralization or elimination. Option C is wrong because inventory transfers do not handle purchase order centralization. Option D is wrong because intercompany journals alone do not provide centralized purchasing or direct receipt functionality.

Answer

Create separate purchase orders in each legal entity and use manual journal entries to transfer costs to Contoso US.

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Configure intercompany inventory transfers and use inventory journals to record movements between warehouses.

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Set up intercompany journals to record transactions between legal entities and create elimination rules for consolidation.

Question 7

A company uses Dynamics 365 Finance and Operations for financial management. They need to ensure that all vendor invoices are approved before payment. Which module should they use?

Accepted Answer

Accounts payable. The Accounts payable module in Dynamics 365 Finance and Operations is specifically designed to manage vendor invoices, purchase orders, and payment approvals. It includes invoice matching, approval workflows, and payment holds to ensure invoices are validated and approved before payment is processed.

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Accounts receivable

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General ledger

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Budgeting

Question 8

You are a systems analyst at a multinational corporation using Dynamics 365 Finance. The company operates in multiple countries with different currencies. The CFO requires that all financial reports be presented in the parent company's reporting currency (USD). The company uses the currency translation feature in Dynamics 365 Finance. However, the finance team is unsure about the correct translation method for the income statement accounts. According to accounting standards, income statement accounts should be translated at the average exchange rate for the period. You need to configure the translation method. What should you do?

Accepted Answer

Set the translation method for income statement accounts to 'Average' in the currency translation setup.. Under IAS 21 and ASC 830, income statement accounts are translated at the average exchange rate for the reporting period, while assets and liabilities use the closing rate and equity uses historical rates. Dynamics 365 Finance exposes this through the currency translation setup, where each main account or account category can be assigned a translation method. Selecting 'Average' for income statement accounts produces the rate that best reflects period-wide operating results and avoids distortion from end-of-period volatility.

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Set the translation method for income statement accounts to 'Ending' (same as current).

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Set the translation method for income statement accounts to 'Current' (end of period rate).

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Set the translation method for income statement accounts to 'Historical' (transaction date rate).

Question 9

A company is implementing Dynamics 365 Finance and needs to configure a chart of accounts that supports multiple legal entities with different fiscal requirements. Which structure should be used?

Accepted Answer

Use a shared chart of accounts with separate fiscal calendars per legal entity.. A shared chart of accounts is the recommended approach in Dynamics 365 Finance when multiple legal entities must operate under different fiscal requirements. By sharing the chart of accounts but assigning separate fiscal calendars per legal entity, the organization maintains a consistent account structure across entities while allowing each entity to comply with its own fiscal year, period definitions, and closing schedules. This balances standardization with regulatory flexibility.

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Use a single shared chart of accounts with one shared fiscal calendar.

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Use main accounts only without dimensions.

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Create a separate chart of accounts for each legal entity.

Question 10

A manufacturing company uses Dynamics 365 Finance and Operations. They need to automatically adjust raw material orders when production schedules change. Which feature should they configure?

Accepted Answer

Master planning. Master planning in Dynamics 365 Finance and Operations is the correct feature because it uses demand and supply data to generate planned orders for raw materials. When production schedules change, master planning automatically recalculates material requirements and adjusts planned purchase orders to ensure inventory levels match the new schedule, preventing stockouts or overstock.

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Fixed asset management

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Vendor collaboration

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Inventory journal posting