MB-920 Describe the core capabilities of the finance and operations apps Practice Test 8 — 15 Questions

Question 1

A manufacturing company uses Dynamics 365 Finance and Operations. They need to track the cost of raw materials as they move through production. Which costing method should they use to ensure that inventory valuation reflects the most recent purchase prices?

Accepted Answer

FIFO. FIFO (First In, First Out) is the correct costing method because it assumes that the oldest inventory items are used first, leaving the most recently purchased items in stock. This ensures that the inventory valuation on the balance sheet reflects the most recent purchase prices, which aligns with the requirement to track costs as raw materials move through production in Dynamics 365 Finance and Operations.

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LIFO

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Weighted average

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Standard cost

Question 2

A company uses Dynamics 365 Finance to manage intercompany transactions. They need to automate the elimination of intercompany sales and purchases during consolidation. What feature should they configure?

Accepted Answer

Intercompany elimination rules. Option C is correct because intercompany elimination rules in Dynamics 365 Finance are specifically designed to automate the removal of intercompany sales and purchase transactions during the consolidation process. These rules define matching criteria (e.g., intercompany trade agreements, dimensions) and generate elimination entries that offset the intercompany revenue and expense, ensuring the consolidated financial statements reflect only external transactions.

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Fixed asset management

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Budget control

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Vendor collaboration

Question 3

A company uses Dynamics 365 Supply Chain Management. They want to use AI to predict potential stockouts and suggest reorder quantities. Which feature should they enable?

Accepted Answer

Demand forecasting. Demand forecasting in Dynamics 365 Supply Chain Management uses AI and machine learning to analyze historical transaction data, predict future demand, and proactively identify potential stockouts. It also suggests optimal reorder quantities to maintain inventory levels, directly addressing the scenario's need for AI-driven stockout prediction and replenishment recommendations.

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Product configuration

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Inventory Visibility

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Warehouse management

Question 4

A retail company uses Dynamics 365 Commerce. They need to offer a discount on a specific product line for a limited time. Which pricing mechanism should they configure?

Accepted Answer

Trade agreements. Trade agreements in Dynamics 365 Commerce are the correct pricing mechanism for offering a limited-time discount on a specific product line. They allow you to define price reductions for a specific product or product category for a defined date range, directly controlling the discount amount and validity period. This is the standard way to create time-bound promotional pricing without altering base prices or requiring complex price group assignments.

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Sales tax

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Product categories

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Price groups

Question 5

An organization uses Dynamics 365 Project Operations. They need to track employee time against a project and automatically bill the customer based on the time entries. Which module should they configure?

Accepted Answer

Project management and accounting. In Dynamics 365 Project Operations, the Project management and accounting module is specifically designed to track employee time against projects and automatically generate customer invoices based on time entries. This module integrates time recording with billing rules, enabling automated invoicing from approved timesheets. The other modules lack the project-specific time-to-bill workflow.

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Human resources

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Accounts receivable

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Expense management

Question 6

A company uses Dynamics 365 Finance and Operations. They need to ensure that all purchase orders over $10,000 require approval from a manager. What feature should they configure?

Accepted Answer

Workflows. Workflows in Dynamics 365 Finance and Operations allow you to define automated business processes that route documents, such as purchase orders, for approval based on conditions like amount thresholds. By configuring a purchase order workflow with a condition that triggers approval when the total exceeds $10,000, you ensure manager approval is required for high-value orders.

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Budget control

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Audit policies

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Policy rules

Question 7

A company uses Dynamics 365 Supply Chain Management. They need to track the serial numbers of products sold to customers for warranty management. Which inventory configuration should they use?

Accepted Answer

Serial number tracking. Serial number tracking is the correct inventory configuration because it allows the company to assign a unique identifier to each individual unit of a product. This enables precise tracking of which specific item was sold to which customer, which is essential for managing warranty claims, returns, and service history in Dynamics 365 Supply Chain Management.

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Batch tracking

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Location tracking

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Product dimensions

Question 8

A multinational company uses Dynamics 365 Finance. They need to generate financial statements that comply with both local GAAP and IFRS. What feature should they use?

Accepted Answer

Financial reporting with multiple reporting frameworks. Option D is correct because Dynamics 365 Finance includes a Financial reporting module that supports multiple reporting frameworks, such as local GAAP and IFRS, by allowing the creation of separate financial statements from the same underlying data using different accounting rules and configurations. This feature enables the company to meet dual reporting requirements without maintaining separate ledgers or manual adjustments.

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Currency revaluation

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Intercompany accounting

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Budgeting

Question 9

A company uses Dynamics 365 Commerce. They want to provide personalized product recommendations on their e-commerce site based on customer purchase history. Which AI feature should they enable?

Accepted Answer

Product recommendations. Product recommendations in Dynamics 365 Commerce leverage AI and machine learning to analyze customer purchase history, browsing behavior, and product affinity to generate personalized suggestions on the e-commerce site. This feature is specifically designed to enhance cross-selling and upselling by delivering tailored product lists such as 'Frequently bought together' or 'Customers also viewed'.

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Customer Insights

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Sentiment analysis

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Market analysis

Question 10

A company uses Dynamics 365 Finance and Operations. They need to configure financial dimensions for reporting. Which TWO statements about financial dimensions are correct?

Accepted Answer

Financial dimensions can be used to segment financial data for reporting.. Option A is correct because financial dimensions in Dynamics 365 Finance and Operations are specifically designed to segment financial data, such as splitting revenue by region or product line, enabling granular reporting and analysis. This segmentation allows organizations to create detailed financial statements and pivot on dimensions like cost center or department for deeper insights.

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Financial dimensions cannot be used in budget control.

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Financial dimensions are only applicable to the main account.

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Financial dimensions can only be used in one account structure at a time.

Question 11

A company uses Dynamics 365 Supply Chain Management. They want to implement a lean manufacturing process. Which THREE features should they configure?

Accepted Answer

Production flows. Production flows are the core modeling element for lean manufacturing in Dynamics 365 Supply Chain Management, defining the sequence of activities and the movement of materials through a value stream. They are required to set up a lean production environment and are the foundation for kanban rules and work cells.

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Bill of materials

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Route operations

Question 12

A company uses Dynamics 365 Finance. They need to automate expense report processing. Which TWO capabilities are available in Expense management?

Accepted Answer

Credit card transaction import. Credit card transaction import (Option B) is a core capability of Expense management in Dynamics 365 Finance, allowing employees to automatically import corporate credit card charges into expense reports, reducing manual entry. AI-powered receipt matching (Option D) uses machine learning to match receipt images to expense line items, streamlining approval and audit processes.

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Integration with payroll for automatic deductions

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Direct submission to general ledger

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Automatic payment to employees

Question 13

Refer to the exhibit. You are configuring a general journal in Dynamics 365 Finance. Based on the JSON snippet, what is the purpose of the 'VoucherSeries' field?

Accepted Answer

It defines the number sequence for vouchers.. The 'VoucherSeries' field in a Dynamics 365 Finance general journal configuration specifies the number sequence that will be used to generate unique voucher numbers for journal entries. This ensures each voucher has a distinct identifier, which is essential for audit trails and financial tracking.

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It defines the journal type (Daily, etc.).

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It defines the description of the journal.

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It defines the name of the journal.

Question 14

Refer to the exhibit. A purchase order has an amount of $15,000 and is pending approval. The workflow 'POApprovalWorkflow' has a condition that requires approval for amounts over $10,000. What will happen if a user tries to submit this purchase order?

Accepted Answer

The purchase order will be submitted for approval.. Option B is correct because the workflow 'POApprovalWorkflow' is configured with a condition that triggers approval for purchase orders exceeding $10,000. Since the purchase order amount is $15,000, it meets the condition and will be submitted to the approval workflow process, not automatically approved, skipped, or rejected.

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The purchase order will be automatically approved.

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The purchase order will be skipped by the workflow.

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The purchase order will be rejected.

Question 15

Refer to the exhibit. An inventory adjustment is being posted for item A-001. The ReasonCode is 'CycleCount'. What is the most likely purpose of this adjustment?

Accepted Answer

To correct inventory after a physical count.. Option A is correct because in Dynamics 365 Supply Chain Management, a cycle count is a type of physical inventory count used to verify on-hand quantities. When the counted quantity differs from the system quantity, an inventory adjustment with the reason code 'CycleCount' is posted to correct the system's on-hand inventory to match the physical count. This ensures inventory accuracy without affecting other transactions like sales or production.

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To record a sales order delivery.

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To adjust for production consumption.

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To receive a purchase order.