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

Question 1

Refer to the exhibit. A data entity export shows the above record for a vendor transaction. Which Dynamics 365 Finance module is this data most likely from?

Accepted Answer

Accounts payable. Correct: The VendTrans table is from Accounts payable. Option A is wrong because General ledger uses LedgerTrans. Option B is wrong because Sales tax uses TaxTrans. Option D is wrong because Fixed assets uses AssetTrans.

Answer

Fixed assets

Answer

General ledger

Answer

Sales tax

Question 2

A manufacturing company uses Dynamics 365 Finance to manage its financial operations. The finance team reports that when they post a purchase invoice, the system occasionally fails to update the general ledger correctly. What is the most likely cause of this issue?

Accepted Answer

Incorrect inventory posting profiles. Option A is correct because inventory posting profiles determine how inventory transactions are posted to the general ledger. If they are not correctly set up, posting may fail or update the wrong accounts. Option B is wrong because payment schedules affect payment timing, not general ledger updates. Option C is wrong because audit policies review transactions after posting, not during. Option D is wrong because budget control settings prevent posting when budget is exceeded, but the issue is intermittent and not related to budget.

Answer

Improperly configured audit policies

Answer

Budget control settings are too restrictive

Answer

Incorrect payment schedule setup

Question 3

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

Accepted Answer

Advanced bank reconciliation. Option B is correct because advanced bank reconciliation allows automatic matching of bank statement lines with bank transactions in the system. Option A is wrong because the general journal is used for manual journal entries. Option C is wrong because the payment journal is used to record payments. Option D is wrong because cash flow forecasting predicts future cash flows, not reconciliation.

Answer

Cash flow forecasting

Answer

Payment journal

Answer

General journal

Question 4

A multinational corporation uses Dynamics 365 Finance with multiple legal entities. The consolidation team needs to eliminate intercompany transactions automatically during the consolidation process. What is the best approach?

Accepted Answer

Define intercompany elimination rules in the consolidation process. Option D is correct because intercompany elimination rules are specifically designed to automatically eliminate intercompany transactions during consolidation. Option A is wrong because manual elimination is error-prone and not automated. Option B is wrong because consolidation companies aggregate data but do not eliminate intercompany transactions automatically. Option C is wrong because the intercompany accounting module records transactions but does not eliminate them during consolidation.

Answer

Use consolidation companies to aggregate data without elimination

Answer

Manually identify and remove intercompany transactions before consolidation

Answer

Set up intercompany accounting to automatically post to both legal entities

Question 5

A service company uses Dynamics 365 Finance to manage fixed assets. They recently acquired a building and want to split the cost between land (non-depreciable) and building (depreciable). How should they set this up?

Accepted Answer

Create two fixed asset records: one for land with non-depreciable profile, and one for building with depreciable profile. Option A is correct because Dynamics 365 Finance allows creating separate fixed asset records for land and building, each with different depreciation profiles. Option B is wrong because a single record cannot have a non-depreciable portion. Option C is wrong because the system does not automatically split cost. Option D is wrong because a sub-asset would still be depreciable, not non-depreciable.

Answer

Create one fixed asset record for the total cost and manually adjust depreciation

Answer

Use the 'Component Depreciation' feature to split the asset

Answer

Create a parent asset for the building and a sub-asset for the land

Question 6

A company wants to use Dynamics 365 Finance to track budget versus actuals for each department. What should they configure?

Accepted Answer

Budget control configuration. Option C is correct because budget control in Dynamics 365 Finance allows tracking budget versus actual expenses at the department level. Option A is wrong because the chart of accounts structures accounts, not budget tracking. Option B is wrong because the general journal is used for entries, not budget tracking. Option D is wrong because financial dimensions allow segmentation but budget control is the feature that tracks against budget.

Answer

Financial dimensions

Answer

Chart of accounts

Answer

General journal

Question 7

An organization is implementing Dynamics 365 Finance and needs to ensure that all vendor invoices are approved before payment. They want to automate three-way matching for purchase order invoices. What must be set up?

Accepted Answer

Accounts payable parameters, invoice matching workflow, and vendor tolerances. Option D is correct because three-way matching requires accounts payable policies, invoice matching workflow, and vendor setup to enable matching. Option A is wrong because only workflow is insufficient. Option B is wrong because only vendor setup is insufficient. Option C is wrong because only invoice matching workflow is insufficient. All three components are necessary.

Answer

Only the invoice matching workflow

Answer

Only accounts payable parameters for invoice matching

Answer

Only vendor tolerances for matching

Question 8

A company using Dynamics 365 Finance needs to generate financial statements in a specific format required by local regulators. Which tool should they use?

Accepted Answer

Financial reporting (Management Reporter). Option A is correct because Financial reporting (Management Reporter) allows creating custom financial statements in various formats. Option B is wrong because Power BI is for data visualization, not formal financial statements. Option C is wrong because the general ledger inquiry shows account balances but not formatted statements. Option D is wrong because Excel integration can help but is not the native tool for regulatory reporting.

Answer

Power BI dashboards

Answer

General ledger inquiry

Answer

Excel export and manual formatting

Question 9

A company wants to use Dynamics 365 Finance to manage its cash flow by forecasting future bank balances. Which module should they use?

Accepted Answer

Cash and bank management. Option C is correct because Cash and bank management includes cash flow forecasting tools. Option A is wrong because Accounts payable manages vendor payments, not forecasting. Option B is wrong because Accounts receivable manages customer payments. Option D is wrong because General ledger is for posting, not forecasting.

Answer

Accounts receivable

Answer

Accounts payable

Answer

General ledger

Question 10

A company using Dynamics 365 Finance notices that some purchase orders are being created with incorrect tax codes. The tax codes are determined by the vendor and item. What should they configure to enforce correct tax codes?

Accepted Answer

Assign appropriate Sales tax groups and Item sales tax groups. Option D is correct because the Sales tax group and Item sales tax group determine the tax code applied. By setting up these groups correctly, the system will automatically select the correct tax code. Option A is wrong because tax codes are assigned to groups, not directly. Option B is wrong because tax authorities are for reporting. Option C is wrong because tax exemptions are for exempt customers.

Answer

Set up tax authorities and reporting codes

Answer

Define tax codes for each vendor and each item

Answer

Configure tax exemption numbers for vendors

Question 11

A company is implementing Dynamics 365 Finance and needs to configure the chart of accounts. Which TWO statements are true about the chart of accounts?

Accepted Answer

The chart of accounts can be shared across multiple legal entities.. Options A and D are correct. The chart of accounts defines the structure of financial accounts, and it can be shared across legal entities. Option B is wrong because main accounts are not deleted if they have transactions. Option C is wrong because account structures define valid combinations, not the chart of accounts itself.

Answer

The chart of accounts includes account structures that define valid dimension combinations.

Answer

Main accounts can be deleted even if they have posted transactions.

Answer

The chart of accounts must be unique for each legal entity.

Question 12

A company uses Dynamics 365 Finance for intercompany transactions. Which THREE components are required to enable intercompany accounting?

Accepted Answer

Intercompany agreements. Options A, C, and D are correct. Intercompany accounting requires defining intercompany relationships, setting up intercompany parameters, and creating intercompany agreements. Option B is wrong because intercompany journals are a result, not a prerequisite. Option E is wrong because consolidation is a separate process.

Answer

Intercompany journals for posting

Answer

Consolidation setup

Question 13

Which TWO features are part of Dynamics 365 Finance for managing accounts payable?

Accepted Answer

Vendor invoice automation. Options A and D are correct. Vendor invoice automation and payment proposals are key accounts payable features. Option B is wrong because collection letters are for accounts receivable. Option C is wrong because billing schedules are for accounts receivable. Option E is wrong because fixed asset depreciation is for fixed assets.

Answer

Billing schedules

Answer

Fixed asset depreciation

Answer

Collection letters

Question 14

You are the finance system administrator for Contoso Ltd., a global manufacturing company with legal entities in the United States, Germany, and Japan. Each entity uses Dynamics 365 Finance and has its own chart of accounts due to local reporting requirements. The CFO wants to consolidate the financial results of all entities into a single consolidated report at the end of each month. Currently, the consolidation is done manually by exporting data to Excel, which is error-prone and time-consuming. The CFO wants to use the consolidation functionality within Dynamics 365 Finance. Additionally, intercompany transactions between entities are significant, and the CFO wants to automate the elimination of these transactions during consolidation. You need to design a solution that meets the following requirements:
- Use the Dynamics 365 Finance consolidation module.
- Automate the elimination of intercompany transactions.
- Allow each entity to maintain its own chart of accounts.
- Generate consolidated financial statements in the US GAAP format.

What should you do?

Accepted Answer

Create a separate consolidation legal entity, set up consolidation groups and accounts to map the different charts, and configure intercompany elimination rules.. Option C is correct. To consolidate with different charts of accounts, you must create a consolidation company that uses a chart of accounts for US GAAP, and set up consolidation groups and accounts to map the source accounts. Intercompany elimination rules can be defined to automate eliminations. Option A is wrong because it suggests changing all entities to use the same chart, which contradicts the requirement. Option B is wrong because Power BI is not the consolidation module. Option D is wrong because the consolidation company should not be used for daily transactions.

Answer

Define the same chart of accounts in all legal entities and then use the consolidation online functionality to consolidate.

Answer

Set up the German and Japanese entities as child companies under the US entity, and then run consolidation.

Answer

Use Power BI to connect to each legal entity's data and create consolidated reports with calculated columns to eliminate intercompany transactions.

Question 15

You are a Dynamics 365 Finance consultant for Northwind Traders, a wholesale distribution company. The company uses Dynamics 365 Finance and is experiencing a problem with vendor payments. The accounts payable clerk reports that when running a payment proposal for a specific vendor, the system includes invoices that are not yet due. The company wants to pay invoices only on their due dates. You review the payment proposal setup and find that the payment proposal uses the default settings. You need to configure the payment proposal to include only invoices that are due on or before the payment date. Additionally, the company wants to apply a discount if payment is made within 10 days of the invoice date (a 2% cash discount). The payment terms must be set up accordingly. You need to ensure that the payment proposal correctly calculates cash discounts for early payment. What should you do?

Accepted Answer

Set the payment proposal date criterion to 'Due date' and set the offset to 0. Configure payment terms with a 2% discount if paid within 10 days.. Option A is correct. By setting the 'Date criterion' to 'Due date' with a 'Payment date' offset of 0, only invoices with due dates on or before the payment date are included. To correctly calculate cash discounts, the payment terms must be set up with the discount percentage and the number of days. Option B is wrong because 'Payment date' criterion uses the invoice date, not due date. Option C is wrong because 'Discount date' criterion is not standard; the system uses payment terms. Option D is wrong because setting offset would include future invoices.

Answer

Set the payment proposal date criterion to 'Due date' and set the offset to 30. Configure payment terms with a 2% discount.

Answer

Set the payment proposal date criterion to 'Payment date' and set the offset to 10. Configure payment terms with a 2% discount if paid within 10 days.

Answer

Set the payment proposal date criterion to 'Discount date' to include invoices where the discount date has passed. Configure payment terms with a 2% discount.

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

Exhibit

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

Exhibit