MB-920 Describe Dynamics 365 Finance Practice Test 12 — 15 Questions

Question 1

Your Dynamics 365 Finance environment experiences slow performance when running the period closing process. Which approach should you recommend to improve performance?

Accepted Answer

Run period closing tasks as batch jobs with multiple threads. Running period closing tasks as batch jobs with multiple threads allows parallel processing of independent tasks, which can significantly reduce the overall closing time. Option C is correct because it leverages parallelism to improve performance. Option A is incorrect because increasing batch group size does not directly improve performance; it may even cause resource contention. Option B (archiving historical data) is a long-term maintenance task, not a direct performance improvement for the closing process. Option D is incorrect because data sharing is for data integration across legal entities, not for performance optimization.

Answer

Increase the maximum batch group size

Answer

Archive historical data

Answer

Use data sharing to distribute closing tasks across legal entities

Question 2

A company wants to use AI to predict customer payment times in Dynamics 365 Finance. Which feature should they enable?

Accepted Answer

Customer payment predictions. Customer payment predictions use AI to forecast when customers will pay invoices. This feature is designed to help businesses predict payment times and manage cash flow more effectively. Option C is correct. Option A (Cash flow forecasting) is for predicting cash inflows and outflows, not specifically customer payment times. Option B (Financial reporting) is for generating financial statements and reports. Option D (Invoice capture) is for automating invoice data entry, not for payment predictions.

Answer

Cash flow forecasting

Answer

Financial reporting

Answer

Invoice capture

Question 3

Your organization uses Dynamics 365 Finance. The controller wants to allow users to enter journal entries but prevent them from posting journals that are out of balance. What should you configure?

Accepted Answer

Journal names setup. Journal names setup allows configuration of parameters including the requirement that journals must be balanced before posting. Therefore, Option B is correct. Option A (Journal approval workflow) handles approval processes, not balance enforcement. Option C (Financial period close) manages period closing activities. Option D (User role permissions) controls user access but does not enforce balance checks.

Answer

Journal approval workflow

Answer

Financial period close

Answer

User role permissions

Question 4

A company is implementing Dynamics 365 Finance and needs to comply with the Sarbanes-Oxley (SOX) act. Which feature should they use to enforce separation of duties?

Accepted Answer

Security roles and duties. To comply with the Sarbanes-Oxley (SOX) act, segregation of duties is enforced through security roles and duties in Dynamics 365 Finance. Option D is correct. Option A (Electronic reporting) is used for generating and processing electronic documents, not for separation of duties. Option B (Audit trail) tracks changes made to the system but does not enforce separation of duties. Option C (Batch job) is used for automated background processing, unrelated to security.

Answer

Electronic reporting

Answer

Audit trail

Answer

Batch job

Question 5

Which TWO features in Dynamics 365 Finance help organizations comply with international accounting standards such as IFRS? (Select TWO.)

Accepted Answer

Multiple posting layers. Multiple posting layers allow organizations to maintain parallel accounting standards for compliance with IFRS and other international accounting standards. Option D is correct because dual currency support enables financial reporting in multiple currencies, which is essential for IFRS compliance. Option B (Vendor payment proposal) is incorrect as it relates to accounts payable, not compliance. Option C (Budget control) is incorrect as it is an internal budgeting tool. Option E (Fixed asset management) is incorrect as it pertains to asset lifecycle management, not specific compliance features.

Answer

Vendor payment proposal

Answer

Budget control

Answer

Fixed asset management

Question 6

Which THREE components are typically part of the general ledger setup in Dynamics 365 Finance? (Select THREE.)

Accepted Answer

Chart of accounts. Options A, B, and E are correct. The chart of accounts (A) is the foundational structure for organizing financial accounts. Main accounts (B) represent individual accounts within the chart of accounts, such as cash or revenue. Financial dimensions (E) provide additional segmentation for reporting, like department or cost center. Option C (Payment schedule) is used for vendor payments and is not part of the general ledger setup. Option D (Customer payment journal) is a subledger journal for recording customer payments, not a component of the general ledger setup.

Answer

Payment schedule

Answer

Customer payment journal

Question 7

Which TWO are valid options for posting vendor invoices in Dynamics 365 Finance? (Select TWO.)

Accepted Answer

Vendor invoice journal. The vendor invoice journal allows direct entry and posting of vendor invoices that are not linked to purchase orders. Option B is correct because the purchase order invoice posting process posts invoices that are linked to purchase orders after receipt. Option C is wrong because sales order invoices are for customer invoices, not vendor invoices. Option D is wrong because the vendor payment journal is used for recording payments to vendors, not invoices. Option E is wrong because production orders are for manufacturing processes, not vendor invoicing.

Answer

Sales order invoice

Answer

Vendor payment journal

Answer

Production order

Question 8

You are using the data management framework to export general journal entries from Dynamics 365 Finance. The exhibit shows a data export job configuration. Which data entity is being exported?

Accepted Answer

GeneralJournalAccountEntry. The exhibit shows "DataEntity": "GeneralJournalAccountEntry", so that is the entity being exported. Option D is correct. Option A (DimensionSetEntry) is for dimension sets, not general journal entries. Option B (GeneralJournalTransaction) is for individual transaction lines. Option C (GeneralJournalEntry) is for the journal header. Only GeneralJournalAccountEntry contains the detailed account-level lines.

Answer

DimensionSetEntry

Answer

GeneralJournalTransaction

Answer

GeneralJournalEntry

Question 9

You are reviewing a journal entry in Dynamics 365 Finance. The exhibit shows the accounting distribution for a transaction. What type of account is 110120 likely to be?

Accepted Answer

Asset account. A main account starting with 1 and having a posting type 'Balance' typically indicates a balance sheet asset account. Option D is correct. Option A is wrong because revenue accounts start with 4. Option B is wrong because liability accounts start with 2. Option C is wrong because expense accounts start with 6.

Answer

Revenue account

Answer

Liability account

Answer

Expense account

Question 10

You are reviewing the period closing checklist in Dynamics 365 Finance as shown in the exhibit. Which task must be completed before the period can be closed?

Accepted Answer

Post vendor invoices. In Dynamics 365 Finance, the period closing checklist includes various tasks, but not all are mandatory for the period to be closed. The critical prerequisite is that all vendor invoices must be posted before the period close can be executed. Unposted invoices would prevent the closing process. Generating the vendor aging report or running currency revaluation are optional or can be done after closing. Therefore, posting vendor invoices is the task that must be completed.

Answer

Generate vendor aging report

Answer

All tasks must be completed

Answer

Run currency revaluation

Question 11

A manufacturing company uses Dynamics 365 Finance to manage its financial operations. The company recently acquired a subsidiary and needs to consolidate financial statements. The subsidiary uses a different fiscal calendar and chart of accounts. What is the recommended approach to consolidate financial data?

Accepted Answer

Use the Consolidate with elimination feature in Dynamics 365 Finance, mapping the subsidiary's accounts to the parent company's chart of accounts.. The Consolidate with elimination feature in Dynamics 365 Finance is designed to consolidate financial data from multiple legal entities, supporting different fiscal calendars and charts of accounts through account mapping and intercompany elimination. Option A is wrong because recreating the subsidiary's chart of accounts is unnecessary and time-consuming; the consolidation feature handles mapping. Option B is wrong because manually exporting and consolidating trial balance data is inefficient and error-prone compared to using the built-in consolidation functionality. Option C is wrong because data integration can import data but does not handle the mapping and elimination required for proper consolidation; the recommended approach is to use the Consolidate with elimination feature.

Answer

Recreate the subsidiary's chart of accounts to match the parent company before consolidation.

Answer

Use the General ledger export process to transfer trial balance data and then manually consolidate.

Answer

Export data from the subsidiary's system and import it into the parent company's Dynamics 365 Finance using data integration.

Question 12

A retail company uses Dynamics 365 Finance and needs to recognize revenue when goods are shipped, not when invoiced. However, the standard process posts revenue at invoice time. What should the financial accountant configure to defer revenue recognition until shipment?

Accepted Answer

Enable Revenue recognition and configure revenue schedules to defer recognition until shipment.. Dynamics 365 Finance includes a Revenue recognition feature that allows deferring revenue until the fulfillment of performance obligations, such as shipment. By enabling Revenue recognition and configuring revenue schedules, the company can recognize revenue at shipment rather than at invoice. Option A is incorrect because free text invoices do not integrate with shipment and would not defer revenue. Option B is incorrect because billing schedules are used for recurring invoices, not for deferring revenue based on shipment. Option D is incorrect because prepayment invoices are for advance payments, not for revenue recognition upon shipment.

Answer

Post revenue using free text invoices at shipment time.

Answer

Set up billing schedules that align revenue with shipping dates.

Answer

Use prepayment invoices to record revenue upon shipment.

Question 13

A company needs to track fixed assets in multiple locations and calculate depreciation differently based on asset type. Some assets use straight-line depreciation, while others use declining balance. What is the best practice to manage this in Dynamics 365 Finance?

Accepted Answer

Define multiple depreciation profiles and assign them to the appropriate fixed asset groups.. Depreciation profiles define the method (e.g., straight-line, declining balance) and can be assigned to different fixed asset groups to accommodate different depreciation methods. Option A is wrong because value models are used for different valuation purposes, not to define depreciation methods. Option B is wrong because asset groups categorize assets but do not directly define depreciation methods. Option D is wrong because fixed asset journals are for posting acquisitions, disposals, and depreciation, but they do not automate the calculation based on method.

Answer

Set up value models with different depreciation conventions for each asset.

Answer

Create separate asset groups for each depreciation method and assign the method to the group.

Answer

Use fixed asset journals to manually calculate and post depreciation for each asset type.

Question 14

A company uses Dynamics 365 Finance and needs to automate the process of converting purchase requisitions into purchase orders. Which feature should be used?

Accepted Answer

Configure a purchase requisition workflow that automatically generates a purchase order when the requisition is approved.. A purchase requisition workflow can be configured to automatically generate a purchase order when the requisition is approved. Option A is incorrect because a procurement catalog defines approved items but does not automate PO creation. Option B is incorrect because vendor collaboration enables external communication, not PO creation from requisitions. Option D is incorrect because the Request for quotation (RFQ) process is for competitive bidding, not automatic PO generation from approved requisitions.

Answer

Set up a procurement catalog to define items that can be ordered.

Answer

Enable vendor collaboration to allow vendors to create purchase orders.

Answer

Use the Request for quotation (RFQ) process to select a vendor and create a purchase order.

Question 15

Refer to the exhibit. A company has configured budget control as shown. A user attempts to create a purchase order for $12,000. The system currently issues a warning but allows the transaction to proceed. The company wants to prevent any transaction exceeding the threshold from being posted. What should the budget controller change in the configuration?

Accepted Answer

Change the ActionOnExceed to Block.. Changing the ActionOnExceed to 'Block' will prevent any transaction exceeding the threshold from being posted. Currently, the action is set to 'Warn', which allows the transaction to proceed with a warning. Option A is incorrect because removing VendorInvoice from the Documents list would disable budget control for that document type, not change the behavior on exceed. Option B is incorrect because changing the BudgetModel to Revised Budget would affect which budget amounts are used for comparison, but not the action when exceeded. Option C is incorrect because changing the BudgetThreshold to $12,000 would match the exact amount, but the system would still issue a warning for amounts exceeding that threshold unless the action is changed to Block.

Answer

Remove VendorInvoice from the Documents list.

Answer

Change the BudgetModel to Revised Budget.

Answer

Change the BudgetThreshold to 12000.