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

Question 1

A company uses Dynamics 365 Project Operations. They need to track project costs and revenue. Which THREE components are essential?

Accepted Answer

Time and expense entry. Time and expense entry (B) is essential because Dynamics 365 Project Operations captures actual labor hours and material costs through time sheets and expense reports, which directly feed into project cost and revenue calculations. Without this component, the system cannot track the consumption of resources against project budgets or generate accurate billing data.

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Resource management

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Fixed asset management

Question 2

A company uses Dynamics 365 Supply Chain Management. They want to implement vendor collaboration to allow vendors to view purchase orders and confirm delivery dates. Which feature should they enable?

Accepted Answer

Vendor portal. The Vendor portal (also known as the Vendor collaboration workspace) in Dynamics 365 Supply Chain Management enables external vendors to access specific purchase orders, confirm delivery dates, and respond to order changes directly through a secure web interface. This feature is designed specifically for collaborative scenarios where vendors need to view and update order-related information without requiring full system access.

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Vendor invoice automation

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Vendor bidding

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Procurement and sourcing

Question 3

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 4

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 5

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 6

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 7

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 8

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 9

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 10

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 11

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 12

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 13

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 14

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 15

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