MB-920 Describe Dynamics 365 Finance Practice Test 10 — 15 Questions

Question 1

Match each Dynamics 365 Human Resources entity to its role.

Accepted Answer

Worker: Represents an individual employed by the organization. In HR, Worker tracks individuals, Position is a specific assignment of a Job. Distractors confuse Job with location or Worker with role.

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Job: A specific physical location where work is performed

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Worker: A set of duties and responsibilities grouped into a role

Question 2

A company uses Dynamics 365 Finance. The accounts payable manager wants to automate the process of matching purchase orders, product receipts, and vendor invoices. Which feature should they use?

Accepted Answer

Accounts payable invoice matching. Accounts payable invoice matching in Dynamics 365 Finance automates the three-way match between purchase orders, product receipts, and vendor invoices, flagging discrepancies for review. It is the built-in feature designed specifically for this AP reconciliation process. Enabling invoice matching lets the AP manager enforce tolerances and reduce manual verification.

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Vendor collaboration

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Budget control

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Fixed assets management

Question 3

A multinational organization uses Dynamics 365 Finance. They need to consolidate financial data from subsidiaries that use different currencies and accounting standards. The consolidation must be performed automatically on a monthly basis. What should they configure?

Accepted Answer

Consolidation and currency translation. Consolidation and currency translation in Dynamics 365 Finance is the feature that aggregates subsidiary financials into a parent entity while translating amounts from foreign currencies using defined exchange rates. It supports automated monthly runs via batch jobs and can handle differing accounting standards through account mapping. This directly matches the requirement for automatic monthly consolidation across currencies.

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Fixed assets management

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Intercompany accounting

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Budget planning

Question 4

A company is implementing Dynamics 365 Finance. They want to use AI to automatically classify vendor invoices and extract key data. Which feature should they enable?

Accepted Answer

AI Builder for invoice processing. AI Builder for invoice processing is the correct feature because it uses prebuilt AI models to automatically classify vendor invoices and extract key data such as invoice number, date, and line items directly within Dynamics 365 Finance. This capability leverages Microsoft's AI Builder, which integrates with Power Automate and Dataverse to process invoices without custom development, aligning with the requirement for AI-driven automation.

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Vendor collaboration

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Optical character recognition (OCR) service

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Power BI reports

Question 5

A manufacturing company uses Dynamics 365 Finance. They need to track the cost of raw materials and finished goods across multiple production stages. Which costing method should they use?

Accepted Answer

Standard costing. Standard costing in Dynamics 365 Finance uses predetermined costs for materials and finished goods, allowing the manufacturer to value inventory and analyze variances across multiple production stages. It is the preferred method when production processes are repetitive and costs are estimated in advance, enabling consistent tracking of raw material and work-in-progress costs.

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Moving average

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Last in, first out (LIFO)

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First in, first out (FIFO)

Question 6

An organization uses Dynamics 365 Finance. The finance team notices that the 'Purchase order' workflow is not triggering correctly for certain vendors. They suspect it's due to conditions in the workflow configuration. Where should they diagnose the workflow condition logic?

Accepted Answer

Purchase order workflow editor. The Purchase order workflow editor is where the workflow conditions are defined and can be diagnosed. In Dynamics 365 Finance, workflows are configured with conditional decisions that determine when the workflow triggers for specific vendors or document types. If the workflow is not triggering correctly for certain vendors, the condition logic (e.g., vendor group, currency, or amount thresholds) must be reviewed in the workflow editor.

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Power Automate flows

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System administration parameters

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Vendor master form

Question 7

A company uses Dynamics 365 Finance. The tax accountant needs to configure value-added tax (VAT) codes for multiple jurisdictions. Where should they set up the VAT rates?

Accepted Answer

Sales tax codes. In Dynamics 365 Finance, value-added tax (VAT) rates are configured using sales tax codes, which are set up in the Tax module, not in General ledger, Accounts payable, or Inventory management parameters. The sales tax code defines the tax rate and calculation method for each jurisdiction, and it is the standard location for VAT rate setup across all modules.

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General ledger parameters

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Accounts payable parameters

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Inventory management parameters

Question 8

A company uses Dynamics 365 Finance. They want to enable Copilot to assist with generating financial reports and answering questions about financial data. What must be configured first?

Accepted Answer

Copilot in Dynamics 365 Finance. B is correct because Copilot in Dynamics 365 Finance must be explicitly enabled and configured as a prerequisite before it can assist with generating financial reports or answering questions about financial data. This involves turning on the Copilot feature within the environment settings and ensuring the necessary permissions and data access are in place.

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Data management framework

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Power BI embedded

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Finance Insights module

Question 9

An organization using Dynamics 365 Finance receives an error when trying to post a vendor invoice: 'Invoice total does not match the expected amount based on the purchase order.' The purchase order has been partially received. What is the most likely cause?

Accepted Answer

The invoice quantity exceeds the received quantity. In Dynamics 365 Finance, when a purchase order is partially received, the system matches the invoice quantity against the received quantity. If the invoice quantity exceeds what has been received, the invoice total will not match the expected amount based on the PO, triggering this error. The most likely cause is that the vendor invoiced for more units than were actually received.

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The invoice is not yet approved in workflow

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The vendor is blocked for posting

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The invoice currency differs from the purchase order currency

Question 10

Which TWO of the following are capabilities of Dynamics 365 Finance? (Choose two.)

Accepted Answer

Fixed asset management. Option C (Fixed asset management) is correct because Dynamics 365 Finance includes a Fixed assets module that handles asset acquisition, depreciation (including bonus and book-specific depreciation), disposal, and reporting for an organization's capital assets. Option E (Budget control) is correct because Dynamics 365 Finance provides Budgeting and budget control functionality, allowing you to define budget models, budget register entries, and budget control rules that check and prevent or warn on actual and encumbered spending against available budget. Option A (Project scheduling) does not belong because detailed project scheduling and resource assignment are capabilities of Dynamics 365 Project Operations (and its scheduling engine), not the core Finance app. Option B (Marketing automation) does not belong because marketing automation, customer journeys, and lead scoring are provided by Dynamics 365 Customer Insights - Journeys (formerly Marketing). Option D (Customer service management) does not belong because case management, queues, and service-level agreements are provided by Dynamics 365 Customer Service.

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Project scheduling

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Marketing automation

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Customer service management

Question 11

Which TWO of the following are features of Dynamics 365 Finance that support compliance with regulatory requirements? (Choose two.)

Accepted Answer

Financial reporting. Financial reporting (A) is correct because Dynamics 365 Finance provides configurable financial reports and statements (e.g., balance sheet, income statement, cash flow) that can be tailored to meet statutory reporting and disclosure requirements in different jurisdictions. Audit trail and change log (B) is correct because the platform tracks database-level and document-level changes, including who changed what and when, which is essential for audit readiness, internal controls, and regulatory traceability. Vendor collaboration (C) is not a compliance feature per se; it supports procurement and supplier interaction. Expense management (D) handles employee expense capture and reimbursement, not regulatory compliance directly. Cash flow forecasting (E) is a treasury and planning tool, not a compliance mechanism.

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Vendor collaboration

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Expense management

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Cash flow forecasting

Question 12

Refer to the exhibit. The JSON shows the configuration for a currency exchange rate in Dynamics 365 Finance. A user reports that when posting a sales invoice in EUR, the system does not automatically convert to USD using the rate shown. What is the most likely reason?

Accepted Answer

The ExchangeRateType is set to Average, which is not used for automatic conversion. The exchange rate type 'Average' is designed for reporting and is not used for automatic conversion during document posting. Dynamics 365 Finance requires a rate type such as 'Spot' or 'Daily' to trigger automatic currency conversion. Option B is incorrect because the CurrencyCode is set correctly to USD (the target currency). Option C is incorrect; a future date does not prevent the rate from being used—it would simply apply when that date becomes current. Option D is incorrect; tolerance settings control rate variance checks, not whether a rate is applied at all.

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The CurrencyCode is set to USD instead of EUR

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The ExchangeRateDate is in the future

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The ExchangeRate is not within the allowed tolerance

Question 13

A company wants to automate the reconciliation of bank transactions with general ledger entries in Dynamics 365 Finance. Which feature should they use?

Accepted Answer

Advanced bank reconciliation. Advanced bank reconciliation in Dynamics 365 Finance is specifically designed to automate the matching of bank transactions with general ledger entries. It provides tools for importing bank statements, matching transactions, and resolving discrepancies, making it the correct feature for this requirement.

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Cash flow forecast

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Budget control

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Payment proposal

Question 14

A company uses Dynamics 365 Finance and needs to track expenses by department and project simultaneously. Which financial dimension configuration should they use?

Accepted Answer

Add Department and Project as financial dimensions to the main account.. Financial dimensions in Dynamics 365 Finance allow you to tag transactions with multiple attributes like Department and Project simultaneously. By adding Department and Project as financial dimensions to the main account, you can track expenses by both dimensions in parallel. This is the standard configuration for multi-dimensional financial reporting.

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Create separate cost centers and cost objects.

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Use main accounts and subaccounts.

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Configure budget codes and budget classes.

Question 15

Which TWO of the following are features of Dynamics 365 Finance?

Accepted Answer

Credit and collections management. Option B (Credit and collections management) is correct because Dynamics 365 Finance includes a dedicated Credit and collections module that handles customer credit limits, aging balances, collection letters, interest notes, and write-off/collection activities for accounts receivable. Option D (Budget planning) is correct because Dynamics 365 Finance provides native budgeting capabilities, including budget planning, budget control, budget register entries, and workflows for allocating and approving budgets across dimensions and periods. Option A (Power BI dashboards) is not a defining feature of Dynamics 365 Finance itself; Power BI is a separate Microsoft analytics service that can consume Finance data but is not a Finance application feature. Option C (Warehouse management) belongs to Dynamics 365 Supply Chain Management, not Finance. Option E (Omnichannel order management) belongs to Dynamics 365 Commerce (and related retail/omnichannel capabilities), not Dynamics 365 Finance.

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Power BI dashboards

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Warehouse management

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Omnichannel order management