MB-920 Describe the core capabilities of the finance and operations apps Practice Test 11 — 15 Questions

Question 1

A company wants to automate the generation of purchase orders when inventory levels fall below a predefined threshold. Which capability in Dynamics 365 Finance and Operations should be configured?

Accepted Answer

Replenishment. Replenishment in Dynamics 365 Finance and Operations is the correct capability because it directly supports automated purchase order generation based on inventory levels falling below a predefined reorder point. This feature uses inventory replenishment rules, such as minimum/maximum stocking levels or reorder point calculations, to trigger purchase orders without manual intervention, ensuring stock availability aligns with demand.

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Demand forecasting

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Vendor collaboration

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Procurement catalogs

Question 2

Your organization is implementing Dynamics 365 Finance and needs to ensure that all financial transactions comply with local regulatory requirements for electronic invoicing in a specific country. Which feature should be configured?

Accepted Answer

Electronic reporting (ER). Electronic reporting (ER) is the correct feature because it provides a configurable tool for generating electronic documents in formats required by local regulations, such as electronic invoices. ER allows you to define the data model, mapping, and format for outbound documents, ensuring compliance with country-specific electronic invoicing requirements without custom code.

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Data entities

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Budget control

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Audit policies

Question 3

A manufacturing company wants to track the cost of raw materials used in production in real-time. Which costing method should they use in Dynamics 365 Supply Chain Management?

Accepted Answer

Standard costing. Standard costing is the correct method because it uses predetermined costs for raw materials, enabling real-time variance analysis against actual costs. This allows the manufacturing company to immediately identify and track cost deviations during production, which is essential for real-time cost monitoring in Dynamics 365 Supply Chain Management.

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FIFO (First In, First Out)

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LIFO (Last In, First Out)

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Moving average

Question 4

A company uses Dynamics 365 Finance and wants to streamline the approval of purchase requisitions. They need to ensure that requisitions over $10,000 are approved by a manager, while those over $50,000 require director approval. What should they configure?

Accepted Answer

Workflow. A is correct because Dynamics 365 Finance uses workflows to automate and enforce approval processes based on configurable conditions. By setting up a purchase requisition workflow, you can define approval thresholds (e.g., over $10,000 requires manager approval, over $50,000 requires director approval) using conditional decisions within the workflow designer.

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Audit policies

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Role-based security

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Business rules

Question 5

A multinational organization wants to consolidate financial data from multiple legal entities into a single reporting entity for quarterly financial statements. Which Dynamics 365 Finance feature should they use?

Accepted Answer

Consolidations. Consolidations in Dynamics 365 Finance is the dedicated feature for aggregating financial data from multiple legal entities into a single reporting entity. It supports both periodic and online consolidation processes, allowing organizations to combine trial balances, eliminate intercompany transactions, and generate consolidated financial statements for quarterly reporting.

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Budgeting

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Cash flow forecasting

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Intercompany accounting

Question 6

A company wants to optimize inventory levels by analyzing historical sales data and predicting future demand. Which module in Dynamics 365 Supply Chain Management should they use?

Accepted Answer

Demand forecasting. Demand forecasting in Dynamics 365 Supply Chain Management uses historical sales data and machine learning models to predict future demand, enabling optimized inventory levels. It integrates with the master planning module to generate replenishment suggestions, directly addressing the scenario's need to analyze past data and forecast demand.

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Warehouse management

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Production control

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Transportation management

Question 7

A retail company plans to use Dynamics 365 Commerce for both online and physical store operations. They need to ensure that inventory across all channels is synchronized in near real-time. Which feature should they leverage?

Accepted Answer

Distributed Order Management (DOM). Distributed Order Management (DOM) is the correct feature because it enables near real-time inventory synchronization across online and physical store channels by intelligently routing orders to the optimal fulfillment location based on current stock levels. This ensures that inventory data is consistently updated across all sales channels, preventing overselling and enabling seamless omnichannel operations.

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Loyalty programs

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Product recommendations

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Call center functionality

Question 8

A manufacturing company uses Dynamics 365 Supply Chain Management and wants to automate the creation of production orders when a sales order is received for a make-to-order item. What should they configure?

Accepted Answer

Master planning. Master planning in Dynamics 365 Supply Chain Management can automatically generate planned production orders when a sales order is created for a make-to-order (MTO) item. By setting the item's coverage group to 'Make-to-order' and running master planning, the system creates a production order to fulfill the exact sales order quantity, enabling automated order-driven manufacturing.

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Route management

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Kanban rules

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Bill of materials

Question 9

A company wants to use Dynamics 365 Finance to automatically recognize revenue over time for subscription-based services. Which feature should they configure?

Accepted Answer

Revenue recognition. Revenue recognition in Dynamics 365 Finance enables automatic scheduling and deferral of revenue based on contract terms, such as subscription services. It uses deferred revenue schedules and fair value allocation to recognize revenue over time, aligning with ASC 606 and IFRS 15 standards.

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Fixed assets management

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Accounts payable

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Budgeting

Question 10

A company is implementing Dynamics 365 Supply Chain Management to improve warehouse efficiency. Which TWO features can help optimize picking and packing processes?

Accepted Answer

Wave processing. Wave processing (B) is correct because it allows grouping of picking work into waves based on criteria such as shipment, route, or warehouse zone, enabling efficient batch release and optimized picking routes. Cluster picking (D) is correct because it enables a single picker to pick items for multiple orders simultaneously by grouping them into clusters, reducing travel time and increasing throughput in the packing process.

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Cycle counting

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Route planning

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Cross-docking

Question 11

A company wants to use Dynamics 365 Finance for advanced financial planning and analysis. Which THREE capabilities should they enable?

Accepted Answer

Budgeting. Budgeting (C) is a core capability in Dynamics 365 Finance that enables organizations to create, manage, and analyze budgets, which is essential for advanced financial planning and analysis. It integrates with general ledger and other modules to support budget control, budget planning, and budget reporting, allowing for proactive financial management.

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Accounts payable

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Invoice capture

Question 12

A company uses Dynamics 365 Supply Chain Management and wants to reduce stockouts. Which TWO strategies should they implement?

Accepted Answer

Reorder point. Reorder point is correct because it triggers a replenishment order when inventory falls to a predefined level, directly preventing stockouts by ensuring timely restocking. Safety stock is correct because it maintains an extra buffer of inventory above expected demand to absorb variability in supply or demand, reducing the risk of stockouts during lead time fluctuations.

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Vendor managed inventory

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ABC classification

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Cycle counting

Question 13

You review the batch job configuration for inventory closing. What is the expected outcome of this job?

Accepted Answer

Run inventory closing and update costs. Option C is correct. The batch job runs inventory closing daily at 23:00, updating costs. Option A is wrong because revaluation is a separate process. Option B is wrong because posting is not specified. Option D is wrong because recalculation is different from closing.

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Recalculate inventory quantities

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Post inventory transactions to the general ledger

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Revalue inventory items

Question 14

You are importing a general journal entry using the data entity. The JSON above represents a single line. Based on the data, what should be the credit entry to balance the journal?

Accepted Answer

MainAccount 201000 with Credit 1000.00. The general journal entry must balance with equal debits and credits. The JSON shows a debit of 1000.00 to MainAccount 110000 (Cash). To balance, the credit entry must be for the same amount, 1000.00, to a liability or equity account. MainAccount 201000 (Accounts Payable) is a typical credit-side account, making option A correct.

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MainAccount 110000 with Credit 1000.00

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MainAccount 601000 with Credit 1000.00

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MainAccount 601000 with Debit 0.00 and Credit 0.00

Question 15

You are analyzing inventory transactions. What does the SQL query return?

Accepted Answer

Items with total sold quantity greater than 1000 in the first quarter of 2025. The SQL query uses a WHERE clause to filter transactions for the first quarter of 2025 and a HAVING clause with SUM(Quantity) > 1000 to aggregate total sold quantity per item, returning only those items whose total sold quantity exceeds 1000. This matches option A, as the query specifically retrieves items with total sold quantity greater than 1000 in Q1 2025.

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Items with the lowest sales quantity in the first quarter

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All items sold in the first quarter of 2025

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The total quantity sold for each item in the first quarter