MB-920 Describe Dynamics 365 Finance Practice Test 14 — 15 Questions

Question 1

A company is implementing Dynamics 365 Finance. They need to ensure that when a sales invoice is posted, the system automatically creates a related project transaction for work breakdown structure (WBS) elements. Which integration feature should they use?

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

Accepted Answer

Project accounting integration. Project accounting integration in Dynamics 365 Finance automatically creates project transactions from posted sales invoices when work breakdown structure (WBS) elements are linked. Option B (Procurement integration) is for purchase-related transactions, not sales invoices. Option C (Budgeting integration) handles budget control, not project transaction creation. Option D (Accounts receivable integration) focuses on customer payments and receivables, not project transactions.

Answer

Procurement integration

Answer

Budgeting integration

Answer

Accounts receivable integration

Question 2

Which TWO features in Dynamics 365 Finance support compliance with regulatory reporting requirements for financial statements?

Accepted Answer

Electronic reporting. Options C and E are correct because Electronic reporting allows configuring tax and financial reports per regulatory formats, and Financial reporting enables designing reports compliant with GAAP/IFRS. Option A is incorrect because Budget control is for monitoring budgets, not reporting. Option B is incorrect because Intercompany accounting is for internal transactions. Option D is incorrect because Fixed assets management is for asset tracking, not reporting.

Answer

Budget control

Answer

Intercompany accounting

Answer

Fixed assets management

Question 3

Which THREE components are part of the Dynamics 365 Finance General ledger module?

Accepted Answer

Main accounts. Options B, C, and D are correct because Main accounts are fundamental to the General ledger, Ledger calendar defines fiscal periods for the general ledger, and Chart of accounts structures the account framework. Option A is incorrect because Inventory posting profiles are part of Inventory management, not the General ledger. Option E is incorrect because Payment schedules are used in Accounts payable and Accounts receivable, not the General ledger.

Answer

Inventory posting profiles

Answer

Payment schedule

Question 4

Which TWO are valid document types in Dynamics 365 Finance for budget control?

Accepted Answer

Purchase requisitions. Purchase requisitions and purchase orders are valid document types that can be subject to budget control in Dynamics 365 Finance. Sales orders are not typically subject to budget control directly. General journals can be used for budget control but are not considered document types in this context; budget control is often applied to subledger documents. Vendor invoices are also not typically subject to budget control directly.

Answer

Sales orders

Answer

General journals

Answer

Vendor invoices

Question 5

A manufacturing company wants to track the cost of raw materials from purchase to finished goods. Which module in Dynamics 365 Finance should they primarily use?

Accepted Answer

Inventory management. Inventory management is the primary module for tracking raw material costs from purchase through production to finished goods. It integrates with production control to calculate actual costs. Accounts payable handles vendor invoices, not cost tracking. Budgeting is for financial planning, not operational cost tracking. General ledger provides high-level financial reporting, not detailed cost tracking.

Answer

Accounts payable

Answer

Budgeting

Answer

General ledger

Question 6

A company is implementing Dynamics 365 Finance and needs to ensure that all purchase orders over $10,000 require approval from a manager. What is the best approach to configure this?

Accepted Answer

Create a purchase order approval workflow. Correct: A purchase order approval workflow can be configured to require approval based on thresholds such as amount. Option B is wrong because procurement policies govern vendor selection and procurement processes, not approval thresholds. Option C is wrong because budget control rules enforce budget limits but do not trigger approvals for specific amounts. Option D is wrong because security roles control access to features, not approval processes.

Answer

Configure a procurement policy

Answer

Set up a budget control rule

Answer

Assign a security role to managers

Question 7

A multinational company uses Dynamics 365 Finance. They need to report financial data in both local GAAP and IFRS. Which feature should they use?

Accepted Answer

Financial dimensions. Correct answer: D - Financial dimensions. Financial dimensions in Dynamics 365 Finance allow you to track financial data by different attributes, such as cost center, department, or accounting standard. By setting up a financial dimension for 'Accounting Standard' and assigning values like 'Local GAAP' and 'IFRS', you can report in both standards simultaneously. Option A is incorrect because Currency translation deals with converting amounts between currencies, not accounting standards. Option B is incorrect because Ledger period refers to the fiscal period (month, quarter, year) for transactions, not for tracking different standards. Option C is incorrect because Consolidation is used to combine financial results of multiple legal entities, not to report under multiple accounting standards within one entity.

Answer

Currency translation

Answer

Ledger period

Answer

Consolidation

Question 8

A company using Dynamics 365 Finance needs to allocate overhead costs to different departments based on square footage. What should they set up?

Accepted Answer

Allocation rules in General ledger. Correct: Allocation rules in General ledger allow distribution of overhead costs based on defined criteria like square footage. Option A is wrong because Budget transfer is for moving budget amounts, not overhead allocation. Option B is wrong because Cost accounting focuses on internal cost analysis, not direct allocation rules. Option D is wrong because Fixed asset depreciation deals with asset value reduction, not cost allocation.

Answer

Budget transfer

Answer

Cost accounting

Answer

Fixed asset depreciation

Question 9

A company is migrating from a legacy system to Dynamics 365 Finance. They have historical data that must be imported with proper financial dimensions. What is the recommended approach?

Accepted Answer

Use the Data management framework. Correct: Use Data management framework for import, as it supports bulk data import with financial dimensions. Option A is wrong because the Excel add-in is for simple data entry, not complex imports. Option C is wrong because Power Platform is for extensions and custom apps, not the recommended import tool. Option D is wrong because Entity store is for reporting, not data import.

Answer

Use the Excel add-in to manually enter data

Answer

Build a custom app in Power Platform

Answer

Use Entity store for data import

Question 10

A company needs to ensure that only users with the 'Accounts payable manager' role can approve vendor invoices. How should this be configured?

Accepted Answer

Assign the role in Security configuration. Correct: Assign the role in Security configuration. In Dynamics 365 Finance, roles are assigned via the Security configuration to control user permissions. Option A is incorrect because an Organization hierarchy defines reporting structures, not specific role-based access for invoice approval. Option B is incorrect because an Audit policy is used for monitoring transactions, not for controlling approval rights. Option C is incorrect because while a workflow can specify which roles can perform actions, the role must first be assigned to users via Security configuration for the workflow to enforce it.

Answer

Configure an Organization hierarchy

Answer

Set up an Audit policy

Answer

Create a workflow that requires the role

Question 11

A company uses Dynamics 365 Finance and wants to streamline the process of reconciling bank statements with ledger entries. What feature should they use?

Accepted Answer

Bank reconciliation. Correct: Bank reconciliation automates the matching of bank statements with ledger entries, streamlining the reconciliation process. Option A is wrong because Budget control is used for enforcing budget limits, not reconciliation. Option B is wrong because Cash flow forecasting predicts future cash flows, not reconciliation. Option C is wrong because Payment proposals generate payment suggestions, not reconciliation.

Answer

Budget control

Answer

Cash flow forecasting

Answer

Payment proposals

Question 12

A company needs to comply with a new regulation requiring that all journal entries be approved by a supervisor before posting. The company uses Dynamics 365 Finance. What should they configure?

Accepted Answer

Create a journal approval workflow. Correct: Create a journal approval workflow. Option A is wrong because Financial dimension sets are for reporting, not for approval. Option B is wrong because General ledger parameters include various settings but not journal approval workflows. Option D is wrong because Audit trail settings track changes but do not enforce approvals.

Answer

Configure financial dimension sets

Answer

Modify general ledger parameters

Answer

Enable audit trail settings

Question 13

Which TWO are key features of Dynamics 365 Finance?

Accepted Answer

Financial reporting. Correct: Financial reporting and Budgeting are core features of Dynamics 365 Finance. Option A is wrong because Human resources is a separate module handled by Dynamics 365 Human Resources, not by Finance. Option B is wrong because Inventory management is part of Dynamics 365 Supply Chain Management. Option C is wrong because Customer relationship management is in Dynamics 365 Sales. Options D and E are correct as they are fundamental financial management features.

Answer

Human resources

Answer

Inventory management

Answer

Customer relationship management

Question 14

Which THREE are valid financial dimensions in Dynamics 365 Finance?

Accepted Answer

Cost center. Department, Cost center, and Project are standard financial dimensions in Dynamics 365 Finance. Vendor is not a financial dimension; it is a default dimension used in transactions. Location is not a financial dimension; it is part of operating units or inventory dimensions. Therefore, the correct three options are B (Cost center), D (Project), and E (Department).

Answer

Vendor

Answer

Location

Question 15

Which TWO are benefits of using Copilot in Dynamics 365 Finance?

Accepted Answer

Automated data entry suggestions. Automated data entry suggestions (A) and natural language query for financial reports (C) are key benefits of Copilot in Dynamics 365 Finance. Option B is incorrect because automatic tax calculation is already a standard feature in the system. Option D is incorrect because manual journal entries are still required for various transactions. Option E is incorrect because direct ledger postings require proper approval workflows.

Answer

Automatic tax calculation

Answer

Elimination of manual journal entries

Answer

Direct ledger postings without approval