MB-920 Describe the core capabilities of the finance and operations apps Practice Test 17 — 15 Questions

Question 1

A company implements Dynamics 365 Supply Chain Management. Which THREE features are part of the core capabilities of the warehouse management module? (Choose three.)

Accepted Answer

Location directives. Location directives (A) are a core warehouse management capability because they define the rules that determine where inventory is put away and picked, driving directed put-away and picking work in Dynamics 365 Supply Chain Management. Cycle counting (D) is also core to warehouse management, as it provides periodic, location-based inventory counting to maintain accuracy without halting operations. Wave processing (E) is core as well, since waves group and release picking work to the warehouse floor, enabling coordinated outbound processing. Procurement catalogs (B) belong to the procurement and sourcing module, and demand forecasting (C) is part of master planning, so neither is a warehouse management core feature.

Answer

Procurement catalogs

Answer

Demand forecasting

Question 2

You are a Dynamics 365 consultant for a medium-sized manufacturing company that recently deployed Dynamics 365 Finance and Operations. The company uses the Production control module to manage manufacturing orders. They report that when a production order is started, the system does not automatically reserve raw materials from inventory, causing stockouts on the shop floor. The warehouse team manually reserves materials after the order is released. You need to configure the system so that raw materials are automatically reserved when a production order status is changed to 'Started'. The company uses standard cost inventory valuation. What should you do?

Accepted Answer

Set the 'Automatic reservation' field on the production order defaults to 'At start'.. The 'Automatic reservation' field on the production order defaults controls when raw materials are physically reserved. Setting it to 'At start' ensures that when a production order status changes to 'Started', the system automatically reserves the required raw materials from inventory, preventing stockouts on the shop floor. This is a standard configuration in Dynamics 365 Finance and Operations for production control.

Answer

Set the 'Reservation hierarchy' on the item model group to 'Single level'.

Answer

Set the 'Default financial dimensions' on the finished good item to include the warehouse dimension.

Answer

Enable 'Auto-report as finished' on the bill of materials (BOM).

Question 3

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.

Answer

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

Answer

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

Answer

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

Question 4

A company uses Dynamics 365 Finance and Operations and has multiple legal entities. The parent company needs to monitor the cash position of all subsidiaries in real time. Currently, each subsidiary uses its own bank account and currency. You need to configure a solution that provides a consolidated view of cash balances across all entities in the parent company's currency (EUR). The solution must support drill-down to individual bank transactions. The company uses the Cash and bank management module. What should you do?

Accepted Answer

Configure a cash position that includes bank accounts from all legal entities with currency exchange rates.. The Cash position feature in Dynamics 365 Finance and Operations allows you to configure a consolidated view of cash balances across multiple legal entities by including bank accounts from all subsidiaries and applying currency exchange rates to convert balances to the parent company's currency (EUR). This solution supports drill-down to individual bank transactions, meeting the real-time monitoring requirement.

Answer

Use Microsoft Power BI to connect to each legal entity's Cash and bank management data.

Answer

Set up intercompany accounting to automatically transfer cash balances to the parent company.

Answer

Use the bank reconciliation workspace to view each subsidiary's bank transactions.

Question 5

A manufacturing company uses Dynamics 365 Finance and Operations. They want to streamline their procurement process and improve supplier collaboration. Which TWO capabilities should they consider?

Accepted Answer

Procurement catalogs. Option A, Procurement catalogs, is correct because catalogs in Dynamics 365 Finance and Operations let employees order approved items and services from internal or external suppliers through a standardized, controlled purchasing experience, which directly streamlines the procurement process. Option E, Vendor collaboration, is correct because the Vendor collaboration workspace and vendor portal enable suppliers to respond to RFQs, confirm purchase orders, manage invoices, and view performance data, which directly improves supplier collaboration. Option B, Project accounting, is incorrect because it focuses on tracking project costs, revenue, and billing rather than procurement or supplier interaction. Option C, Fixed asset management, is incorrect because it handles acquisition, depreciation, and disposal of fixed assets, not purchasing workflows or supplier engagement. Option D, Demand forecasting, is incorrect because it supports inventory and supply planning through predicted demand, not the procurement-to-supplier collaboration scenario described.

Answer

Project accounting

Answer

Fixed asset management

Answer

Demand forecasting

Question 6

A distribution company uses Dynamics 365 Finance and Operations. The warehouse manager wants to improve inventory accuracy and reduce picking errors. Which THREE features should they implement?

Accepted Answer

Location directives. Location directives (A) are correct because they define the rules that determine where items are put away and picked from, directing warehouse workers to the optimal locations and thereby reducing picking errors and improving inventory accuracy. Cycle counting (C) is correct because it enables periodic, ongoing counting of inventory by location or item without shutting down operations, which helps identify and correct discrepancies to maintain accurate on-hand quantities. Warehouse mobile device support (E) is correct because it lets workers scan barcodes and confirm picks, puts, and counts directly on handheld devices, validating transactions in real time and minimizing manual data-entry mistakes that cause picking errors. Demand forecasting (B) is not directly aimed at reducing picking errors or improving on-hand accuracy; it supports planning and replenishment. Vendor collaboration (D) focuses on supplier interactions such as purchase order and invoice collaboration, which does not address warehouse picking accuracy.

Answer

Demand forecasting

Answer

Vendor collaboration

Question 7

You are a functional consultant for a retail company deploying Dynamics 365 Finance and Operations. The client wants to manage their financial consolidation across multiple legal entities with different chart of accounts. They need to eliminate intercompany transactions automatically during consolidation. Which feature should you recommend?

Accepted Answer

Consolidation [Elimination]. The Consolidation [Elimination] feature in Dynamics 365 Finance is specifically designed to handle financial consolidation across multiple legal entities with different charts of accounts. It automatically generates elimination entries to remove intercompany transactions, ensuring that consolidated financial statements reflect only external activities. This directly meets the client's requirement for automated elimination during consolidation.

Answer

Financial reporting

Answer

Intercompany accounting

Answer

Budget planning

Question 8

A wholesale distributor uses Dynamics 365 Finance and Operations. They are experiencing high shipping costs because customer orders are often split across multiple shipments from different warehouses. They want to minimize split shipments by consolidating orders to the nearest warehouse with sufficient stock. Which feature should they configure?

Accepted Answer

Wave processing. Wave processing in Warehouse management allows grouping picking work for multiple orders into a single wave, enabling shipment consolidation from the same warehouse. By configuring wave templates and shipment consolidation rules, orders can be combined to minimize split shipments. While Transportation management offers a dedicated 'Shipment consolidation' feature, among the given options, Wave processing (Option A) is the most appropriate. Option B (Warehouse demand replenishment) is for stock replenishment, Option C (Inventory visibility) for real-time inventory, and Option D (Location directives) for put-away/picking routing; none directly consolidate shipments.

Answer

Warehouse demand replenishment

Answer

Inventory visibility

Answer

Location directives

Question 9

A multinational manufacturing company uses Dynamics 365 Finance and Operations with multiple legal entities. The finance team needs to run the month-end close process efficiently across all entities, ensuring that intercompany transactions are reconciled and that all journals are posted before consolidation. They want to automate the close workflow. Which feature should they use?

Accepted Answer

Financial period close. Financial period close in Dynamics 365 Finance and Operations provides a structured, automated workflow to manage the month-end close process across multiple legal entities. It enforces a predefined close checklist, ensures intercompany transactions are reconciled, and prevents posting after the close is completed, enabling efficient consolidation.

Answer

Financial reporting

Answer

Intercompany accounting

Answer

Budget control

Question 10

A company using Dynamics 365 Finance and Operations wants to implement a new policy that requires all purchase orders over $10,000 to be approved by a manager before being submitted to the vendor. They need a flexible approval process that can be modified without developer intervention. What should they configure?

Accepted Answer

Procurement and sourcing workflows. Procurement and sourcing workflows in Dynamics 365 Finance and Operations provide configurable, no-code approval processes for purchase orders, including conditions such as total amount thresholds. A workflow can be configured so that any PO over $10,000 routes to a manager for approval before it can be confirmed and sent to the vendor. Because workflows are configured through the UI, no developer intervention is required to modify them.

Answer

Vendor collaboration

Answer

Procurement catalogs

Answer

Purchase agreements

Question 11

A retail chain uses Dynamics 365 Finance and Operations. They are planning to expand to a new country and need to comply with local tax regulations, including VAT reporting and electronic invoicing. They want to leverage built-in capabilities rather than custom development. What should they configure?

Accepted Answer

Tax engine and Electronic reporting. The Tax engine and Electronic reporting (ER) are the built-in capabilities in Dynamics 365 Finance and Operations designed to handle complex tax regulations like VAT reporting and electronic invoicing. The Tax engine allows configuration of tax codes, rates, and rules for different jurisdictions, while Electronic reporting enables the generation of legally required electronic invoice formats (e.g., XML, EDI) without custom code. This directly addresses the need to comply with local tax regulations in a new country using out-of-the-box features.

Answer

Accounts payable

Answer

General ledger

Answer

Cash and bank management

Question 12

A logistics company uses Dynamics 365 Finance and Operations to manage freight and transportation. They want to optimize delivery routes and reduce fuel costs by automatically consolidating shipments going to the same geographic area. Which feature should they enable?

Accepted Answer

Transportation management. Transportation management (option B) is the correct feature because it is specifically designed to handle freight and transportation operations, including route optimization and shipment consolidation. By automatically grouping shipments destined for the same geographic area, it reduces the number of trips, lowers fuel costs, and improves delivery efficiency. This capability is built into the Transportation management module of Dynamics 365 Finance and Operations.

Answer

Warehouse management

Answer

Inventory management

Answer

Sales and marketing

Question 13

A service company uses Dynamics 365 Finance and Operations and wants to track project costs against budgets in real-time. They need to automatically prevent further spending when a project exceeds its budget. Which feature should they configure?

Accepted Answer

Budget control. Budget control in Dynamics 365 Finance and Operations is the correct feature because it enables real-time tracking of project costs against budgets and can automatically prevent further spending when a budget threshold is exceeded. It enforces budget limits by checking available budget balances before transactions are posted, and can block or warn users when a project's budget is exhausted. This directly meets the requirement to stop spending automatically when a project exceeds its budget.

Answer

Expense management

Answer

Project accounting

Answer

Fixed asset management

Question 14

A global manufacturer uses Dynamics 365 Finance and Operations with multiple production sites. They need to manage complex bills of materials (BOMs) that include both manufactured and purchased components. They want to ensure that when a BOM is changed, the system automatically re-plans production orders and re-calculates material requirements. Which feature should they use?

Accepted Answer

Master planning. Master planning in Dynamics 365 Finance and Operations is the correct feature because it automatically recalculates material requirements and regenerates planned production orders when a bill of materials (BOM) is changed. It uses demand-driven or MRP-based logic to explode the BOM, net available inventory, and create new planned orders for both manufactured and purchased components, ensuring supply matches updated demand across multiple production sites.

Answer

Product configuration

Answer

Production control

Answer

Inventory management

Question 15

A company uses Dynamics 365 Finance and Operations and wants to implement Copilot AI capabilities to assist users with financial analysis. They need to enable natural language queries against financial data, such as 'Show me the total revenue for this quarter compared to last quarter'. What should they enable?

Accepted Answer

Copilot in Dynamics 365 Finance. Copilot in Dynamics 365 Finance is the specific AI-powered feature that enables natural language queries against financial data within the Dynamics 365 Finance module. It allows users to ask questions like 'Show me the total revenue for this quarter compared to last quarter' and receive answers directly from the underlying financial data, leveraging generative AI to interpret the query and retrieve relevant insights without requiring custom development or external services.

Answer

Financial reporting

Answer

Azure OpenAI service

Answer

Power BI integration