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

Question 1

A manufacturing company uses Dynamics 365 Finance to manage its financial operations. The finance team needs to automate the reconciliation of bank transactions with general ledger entries. Which feature should they use?

Choose an answer to begin — your selection is scored in the full session.

Accepted Answer

Advanced bank reconciliation. Advanced bank reconciliation allows automatic matching of bank statements with ledger transactions. Option A is wrong because budget control manages budgets, not reconciliation. Option B is wrong because intercompany accounting handles transactions between legal entities. Option D is wrong because cash flow forecasting predicts future cash positions.

Answer

Budget control

Answer

Intercompany accounting

Answer

Cash flow forecasting

Question 2

A company uses Dynamics 365 Finance with multiple legal entities. They need to view consolidated financial data across all entities without manual intervention. What should they configure?

Accepted Answer

Consolidation. Consolidation in Dynamics 365 Finance automatically aggregates financial data from multiple legal entities. Option A is wrong because currency revaluation adjusts exchange rates, not consolidate data. Option C is wrong because financial dimension sets are used for reporting and analysis hierarchies, not for consolidating data across entities. Option D is wrong because elimination rules remove intercompany transactions during consolidation, but they do not perform the consolidation itself.

Answer

Currency revaluation

Answer

Financial dimension sets

Answer

Elimination rules

Question 3

During a month-end close, a Dynamics 365 Finance user encounters an error when trying to post a vendor invoice. The invoice has been approved but the system shows 'Invoice posting failed due to account validation'. What is the most likely cause?

Accepted Answer

The account combination used is not valid in the chart of accounts.. The most likely cause is an invalid account combination in the chart of accounts (Option D). When a vendor invoice is approved but fails to post with an account validation error, it typically indicates that the debit or credit account specified on the invoice lines does not exist or is not properly configured in the general ledger. Option A is incorrect because a vendor on hold would prevent payment, not invoice posting and validation. Option B is incorrect because the invoice has already been approved, so approval status is not the issue. Option C is incorrect because general ledger journal posting is part of the invoice posting process, not a separate prerequisite. Therefore, the account combination validation failure during the invoice posting process is the most common cause.

Answer

The vendor is on hold in accounts payable.

Answer

The invoice has not been approved by the workflow.

Answer

The general ledger journal for the invoice is not yet posted.

Question 4

A retail company uses Dynamics 365 Finance to manage its fixed assets. They purchase a new delivery truck. Which fixed asset transaction type should they use to record the purchase?

Accepted Answer

Acquisition. Acquisition records the purchase of a fixed asset. Option B is wrong because impairment records a permanent decline in value. Option C is wrong because disposal records the sale or retirement. Option D is wrong because depreciation records the value decrease over time.

Answer

Impairment

Answer

Disposal

Answer

Depreciation

Question 5

A company using Dynamics 365 Finance needs to ensure that purchase requisitions over $10,000 are reviewed by a manager before becoming purchase orders. Which feature should they use?

Accepted Answer

Workflow. Workflow. In Dynamics 365 Finance, the workflow feature allows organizations to define automated approval processes based on rules, such as purchase requisitions exceeding a threshold (e.g., $10,000) requiring manager review before becoming purchase orders. Option A (Purchase agreements) is incorrect because purchase agreements are contracts with vendors specifying terms for purchases, not approval processes. Option C (Procurement catalogs) is incorrect because procurement catalogs manage the list of approved products and services for procurement, not approval workflows. Option D (Budget control) is incorrect because budget control ensures that expenditures do not exceed available budget, but it does not handle approval routing based on requisition amounts.

Answer

Purchase agreements

Answer

Procurement catalogs

Answer

Budget control

Question 6

A Dynamics 365 Finance user reports that the 'Customer payment journal' shows an incorrect exchange rate for a foreign currency payment. The exchange rate was updated yesterday. What is the most likely reason for the incorrect rate?

Accepted Answer

The exchange rate date on the journal is different from the payment date.. The exchange rate date on the journal may default to a date different from the payment date, causing the system to use an incorrect rate even if the rate table was updated correctly. Option A is wrong because the exchange rate table was updated, but the journal date mismatch is the key issue. Option B is wrong because if the currency were not set up for updates, payments would likely fail entirely. Option C is wrong because rounding rules affect the calculated amounts, not the rate applied.

Answer

The exchange rate table was not updated correctly.

Answer

The currency is not set up for exchange rate updates.

Answer

The rounding rule for the currency is incorrect.

Question 7

A company uses Dynamics 365 Finance and wants to automate the generation of financial statements like balance sheets and income statements. Which tool should they use?

Accepted Answer

Financial reporting. Financial reporting is the dedicated tool for creating financial statements like balance sheets and income statements in Dynamics 365 Finance. Option A is wrong because Management reporter is a separate legacy tool, but Financial reporting is the primary tool in D365 Finance. Option B is wrong because Power BI requires integration and is not specifically designed for financial statements. Option D is wrong because Excel integration requires manual work and is not a dedicated reporting solution.

Answer

Management reporter

Answer

Power BI

Answer

Excel integration

Question 8

A Dynamics 365 Finance administrator needs to restrict a user from posting in a specific period that is not yet closed. The user should still be able to enter transactions. What configuration should the administrator use?

Accepted Answer

Ledger period status. (Ledger period status) is correct because it allows an administrator to set a period's status to 'On hold' for a specific user or group, preventing posting while still permitting transaction entry. Option A (Period close) is incorrect because it finalizes the period, preventing both entry and posting. Options C and D are unrelated to user posting permissions.

Answer

Period close

Answer

Fiscal calendar setup

Answer

Audit policies

Question 9

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

Accepted Answer

Reconcile a bank account. The correct actions in cash and bank management are: Reconcile a bank account (A), which matches internal records with bank statements; Forecast cash flow (B), which predicts future cash positions based on incoming and outgoing transactions; and Import bank statements (C), which brings external bank data into the system for reconciliation. Option D (Reverse a check) is typically handled in the check management submodule, not core cash management, and option E (Process credit card payments) is part of Accounts Receivable, not cash and bank management.

Answer

Reverse a check

Answer

Process credit card payments

Question 10

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 C and D are correct. Consolidation in Dynamics 365 Finance requires multiple legal entities to be set up and the chart of accounts must be consistent across entities. Option A is incorrect because entities can use different fiscal calendars; adjustments can be made during consolidation. Option B is incorrect because intercompany transactions are not a prerequisite; consolidation can be performed without them. Option E is incorrect because workflow is optional and not required for consolidation journals.

Answer

All entities must use the same fiscal calendar.

Answer

Intercompany transactions must be configured.

Answer

Workflow must be enabled for consolidation journals.

Question 11

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.. The period status is 'On hold' with the posting restriction 'No posting allowed'. This means that no transactions can be posted in this period, regardless of user role or group membership. Therefore, the invoice dated January 15, 2024, cannot be posted until the period is opened by an authorized user. Option D correctly states this. Option A is incorrect because manager approval does not override the period restriction. Option B is incorrect because no posting is allowed at all. Option C is incorrect because the period status prevents posting.

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 12

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. Starting balance is 50000. A debit of 10000 increases the balance to 60000. A credit of 5000 decreases it to 55000. Another credit of 20000 decreases it to 35000. Option A (30000) is incorrect because it miscalculates the net effect. Option C (40000) is incorrect because it might ignore one of the credits. Option D (45000) is incorrect because it incorrectly adds the credits instead of subtracting.

Answer

30000

Answer

40000

Answer

45000

Question 13

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. 2% discount if paid by January 30, so payment = 5000 * 0.98 = 4900. Option A (4800) is wrong because it applies a 4% discount instead of 2%. Option B (5000) is wrong because it does not apply any discount. Option D (4950) is wrong because it applies only a 1% discount.

Answer

4800

Answer

5000

Answer

4950

Question 14

A manufacturing company uses Dynamics 365 Finance to manage its financial operations. The finance team needs to automate the reconciliation of bank transactions with general ledger entries. Which feature should they use?

Choose an answer to begin — your selection is scored in the full session.

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 creating budgets, not analyzing variances. Option B (Budget register entries) is for recording budget amounts, not analysis. Option C (Fixed asset management) is unrelated to budget analysis. Therefore, D is correct.

Answer

Budget planning

Answer

Budget register entries

Answer

Fixed asset management

Question 15

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. The most efficient way to achieve automated consolidation with intercompany elimination in Dynamics 365 Finance is to set up a consolidation company and define elimination rules. This automates the elimination of intercompany transactions during the consolidation process. Option A (manual elimination) is inefficient and error-prone. Option C (Budget control) is unrelated to consolidation. Option D (Financial reporting with a reporting tree) handles currency translation and reporting, not the actual consolidation process.

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