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

Question 1

During a financial audit, it is discovered that some vendor invoices were posted with incorrect tax codes. The tax codes were set up correctly, but users manually overrode them. How can the company prevent manual tax code overrides in the future?

Accepted Answer

Set the 'Tax code override' option to 'No' in Accounts payable parameters.. Option C is correct by setting the 'Tax code override' option to 'No' in accounts payable parameters. Option A is wrong because workflow approval does not prevent override. Option B is wrong because audit trail records changes but does not prevent them. Option D is wrong because tax settlement is a separate process.

Answer

Enable audit trail for tax code changes.

Answer

Use tax settlement to adjust incorrect tax.

Answer

Implement a workflow approval for tax codes.

Question 2

Which TWO of the following are features of Dynamics 365 Finance for managing intercompany transactions?

Accepted Answer

Intercompany accounting. Option A and Option D are correct. Intercompany accounting allows transactions between legal entities, and elimination rules remove intercompany activity for consolidation. Option B is wrong because consolidation is a separate feature for combining financials. Option C is wrong because budget control is for budget management. Option E is wrong because fixed asset management is for asset tracking.

Answer

Consolidation

Answer

Fixed asset management

Answer

Budget control

Question 3

Which THREE of the following are valid actions when managing cash and bank management in Dynamics 365 Finance?

Accepted Answer

Reconcile a bank account. Options B, C, and E are correct. Bank account reconciliation matches transactions, cash flow forecasting predicts future cash positions, and bank statement import brings in external data. Option A is wrong because check reversal is not a standard cash management action. Option D is wrong because credit card processing is part of accounts receivable, not cash management.

Answer

Reverse a check

Answer

Process credit card payments

Question 4

Which TWO of the following are prerequisites for setting up consolidation in Dynamics 365 Finance?

Accepted Answer

Multiple legal entities must be set up.. Options A and B are correct. Multiple legal entities must exist, and chart of accounts must be consistent. Option C is wrong because intercompany transactions are not required. Option D is wrong because different fiscal calendars are not a prerequisite. Option E is wrong because workflow is optional.

Answer

All entities must use the same fiscal calendar.

Answer

Intercompany transactions must be configured.

Answer

Workflow must be enabled for consolidation journals.

Question 5

Refer to the exhibit. The exhibit shows the period status configuration for the USMF legal entity. An accounts payable clerk in the 'AP clerks' user group is trying to post a vendor invoice dated January 15, 2024. What will happen?

Accepted Answer

The invoice cannot be posted until the period is opened.. Option B is correct because the period status is 'On hold' with posting restriction 'No posting allowed', so the user cannot post the invoice. Option A is wrong because the period is not open. Option C is wrong because the user group is restricted. Option D is wrong because the user cannot post, but can still enter data.

Answer

The invoice can be posted only if the user has manager approval.

Answer

The user can post the invoice but not enter new transactions.

Answer

The invoice will be posted successfully.

Question 6

Refer to the exhibit. The exhibit shows the main account balance and transactions for a checking account. What is the balance after all transactions are posted?

Accepted Answer

35000. Option C is correct: starting balance 50000 + debit 10000 - credit 5000 - credit 20000 = 35000. Option A is wrong because it adds all debits and credits incorrectly. Option B is wrong because it ignores the starting balance. Option D is wrong because it miscalculates.

Answer

30000

Answer

40000

Answer

45000

Question 7

Refer to the exhibit. The exhibit shows a vendor invoice with a cash discount. If the company pays the invoice on January 25, 2024, what is the payment amount?

Accepted Answer

4900. Option B is correct: 2% discount if paid by January 30, so payment = 5000 * 0.98 = 4900. Option A is wrong because it doesn't apply discount. Option C is wrong because it applies wrong percentage. Option D is wrong because it miscalculates.

Answer

4800

Answer

5000

Answer

4950

Question 8

A manufacturing company uses Dynamics 365 Finance. The finance team notices that the actual budget expenditures for the current fiscal year are significantly higher than planned. They need to identify variances and adjust the budget accordingly. Which feature should they use to analyze the budget vs. actuals and make adjustments?

Accepted Answer

Budget control configuration. Budget control configuration allows monitoring of budget funds and analysis of budget vs. actuals. Option A (Budget planning) is for planning, not analysis. Option B (Budget register entries) is for recording, not analysis. Option D (Fixed asset management) is unrelated.

Answer

Budget planning

Answer

Budget register entries

Answer

Fixed asset management

Question 9

A multinational corporation uses Dynamics 365 Finance to manage its financial consolidation across multiple subsidiaries with different currencies. The consolidation must adhere to local GAAP and IFRS. The finance team needs to perform consolidation with elimination of intercompany transactions automatically. What is the most efficient way to achieve this?

Accepted Answer

Set up a consolidation company and use elimination rules. Consolidation with elimination of intercompany transactions is automated through a consolidation company and elimination rules. Option A would require manual adjustments. Option B is for reporting, not consolidation. Option D is not relevant.

Answer

Use the General ledger consolidation process and manually eliminate intercompany transactions

Answer

Use the Budget control module to track intercompany balances

Answer

Configure financial reporting with a reporting tree and currency translation

Question 10

Your organization is implementing Dynamics 365 Finance and needs to manage the financial operations of multiple legal entities. Which module is the primary tool for recording and managing financial transactions for each legal entity?

Accepted Answer

General ledger. The General ledger is the core module for recording all financial transactions. Option B is for accounts payable, Option C is for accounts receivable, Option D is for budgeting.

Answer

Accounts payable

Answer

Accounts receivable

Answer

Budgeting

Question 11

A company uses Dynamics 365 Finance and has a requirement to automatically generate vendor payments based on due dates and available cash. They want to schedule payments for multiple vendors at once. Which feature should they use?

Accepted Answer

Payment proposal. The payment proposal feature in Accounts payable allows automatic generation of payments based on criteria. Option A is for creating payment schedules on purchase orders, not for automatic generation. Option C is for checks. Option D is for manual payment.

Answer

Check management

Answer

Manual payment journal

Answer

Vendor payment schedule

Question 12

Your organization needs to track inventory costs using a perpetual inventory system with weighted average costing method. The finance team wants to ensure that inventory transactions are posted to the general ledger automatically. Which parameter must be configured in Dynamics 365 Finance?

Accepted Answer

Post inventory in ledger parameter. The 'Post inventory in ledger' parameter enables automatic posting of inventory transactions. Option A is for valuation method but not posting. Option B is for item model groups. Option D is for warehouse management.

Answer

Warehouse management parameters

Answer

Inventory model group

Answer

Item model group

Question 13

A company uses Dynamics 365 Finance to manage its fixed assets. They have purchased a new piece of machinery and want to record it in the system. Which module should they use to create the fixed asset record?

Accepted Answer

Fixed assets. The Fixed assets module is used to manage asset records, depreciation, and disposal. Option B is for inventory, Option C is for general ledger, Option D is for budgeting.

Answer

Budgeting

Answer

Inventory management

Answer

General ledger

Question 14

Your organization is implementing Dynamics 365 Finance and needs to manage intercompany transactions between two legal entities. The transactions should be automatically reconciled in the general ledger. Which configuration is required?

Accepted Answer

Intercompany accounting. Intercompany accounting setup enables automatic generation and elimination of intercompany transactions. Option A is for currency translation. Option C is for consolidation. Option D is for company information.

Answer

Currency revaluation

Answer

Organization hierarchy

Answer

Consolidation

Question 15

A company uses Dynamics 365 Finance and needs to generate financial statements that comply with local regulatory requirements. Which feature should they use?

Accepted Answer

Financial reporting. Financial reporting provides customizable reports for compliance. Option B is for budgets. Option C is for intercompany. Option D is for regulatory compliance but not reporting.

Answer

Electronic reporting

Answer

Intercompany accounting

Answer

Budget control