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

Question 1

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 is used to automate business processes, including approvals. By configuring a workflow for purchase requisitions, you can set conditions such as total amount over $10,000 to require approval by a manager before the requisition can proceed to a purchase order. This ensures the required review.

Answer

Purchase agreements

Answer

Procurement catalogs

Answer

Budget control

Question 2

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 built-in Dynamics 365 Finance tool (formerly Management Reporter) used to design and generate statutory financial statements such as balance sheets, income statements, and cash flow statements from ledger data. It provides row/column/reporting-tree definitions that map directly to the chart of accounts and dimensions, so it is the correct choice for automating financial statement generation.

Answer

Management reporter

Answer

Power BI

Answer

Excel integration

Question 3

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.. The correct option is C: setting the 'Tax code override' option to 'No' in Accounts payable parameters directly prevents users from manually changing the default tax code on vendor invoices, which addresses the exact control gap described. Since the tax codes themselves were configured correctly and the problem was manual overrides, this parameter setting enforces the default tax code and blocks user edits at the point of invoice entry. Option A only records changes for auditing and does not stop overrides, while option D adds an approval step rather than preventing the override itself. Option B is a correction mechanism for already-posted tax differences and does not prevent future manual overrides.

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 4

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

Accepted Answer

Intercompany accounting. Intercompany accounting (A) is correct because Dynamics 365 Finance uses it to automatically generate the reciprocal due-to/due-from entries in the counterparty legal entity when an intercompany journal or document is posted, keeping both companies' books balanced without manual duplicate entry. Elimination rules (D) are correct because they define how intercompany balances and transactions are removed during consolidation so that the consolidated financial statements do not double-count revenue, expenses, or balances between affiliated legal entities. Consolidation (B) is not the intercompany transaction feature itself; it is the broader process that consumes intercompany data and can apply elimination rules. Fixed asset management (C) handles asset acquisition, depreciation, and disposal, and budget control (E) enforces spending limits against budget registers—neither manages intercompany due-to/due-from postings or eliminations.

Answer

Consolidation

Answer

Fixed asset management

Answer

Budget control

Question 5

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. Setting up a consolidation company and configuring elimination rules is the standard Dynamics 365 Finance approach for multi-subsidiary consolidation with automatic intercompany elimination. The consolidation company receives translated balances from source legal entities, and elimination rules automatically remove intercompany transactions and balances during the consolidation run.

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 6

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 module in Dynamics 365 Finance is the primary tool for recording and managing financial transactions for each legal entity. It serves as the central repository for all accounting entries, including journal entries, and is the foundation for financial reporting. Accounts payable, accounts receivable, and budgeting are subledgers or supporting modules that feed into the general ledger.

Answer

Accounts payable

Answer

Accounts receivable

Answer

Budgeting

Question 7

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. A payment proposal in Dynamics 365 Finance queries open vendor transactions based on criteria such as due date, cash discount date, and vendor group, then generates suggested payment lines that can be reviewed and posted as a batch. This directly satisfies the requirement to schedule payments for multiple vendors at once based on due dates and available cash.

Answer

Check management

Answer

Manual payment journal

Answer

Vendor payment schedule

Question 8

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 in Dynamics 365 Finance is purpose-built for creating, tracking, depreciating, and disposing of fixed asset records such as machinery, vehicles, and buildings. When a company purchases machinery, the asset record is created in the Fixed assets module, where acquisition cost, depreciation profile, service life, and book setup are configured. This module integrates with the General ledger to post acquisition and depreciation transactions automatically.

Answer

Budgeting

Answer

Inventory management

Answer

General ledger

Question 9

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 in Dynamics 365 Finance enables automatic creation and reconciliation of transactions between legal entities. It requires setting up intercompany accounting relationships, defining due-to/due-from accounts, and configuring posting profiles. This ensures that when a transaction is entered in one legal entity, the corresponding entries are automatically generated in the counterparty legal entity and reconciled in the general ledger.

Answer

Currency revaluation

Answer

Organization hierarchy

Answer

Consolidation

Question 10

A retail company uses Dynamics 365 Finance and wants to implement Copilot (AI-powered assistant) to help the finance team analyze financial data and generate insights. Which feature in Dynamics 365 Finance provides Copilot capabilities?

Accepted Answer

Copilot in finance and operations. Copilot in finance and operations is the AI-powered assistant embedded in Dynamics 365 Finance that helps users analyze financial data, generate insights, and automate tasks using natural language. It is the specific feature that provides Copilot capabilities within the Finance module, leveraging generative AI to summarize data, suggest actions, and answer questions. Power BI embedded, Financial reporting, and AI Builder are separate tools that do not provide the Copilot experience.

Answer

Power BI embedded

Answer

Financial reporting

Answer

AI Builder

Question 11

Which TWO of the following are valid modules in Dynamics 365 Finance? (Select two.)

Accepted Answer

Accounts payable. Accounts payable (A) is a core module in Dynamics 365 Finance, used to manage vendor invoices, payments, and outgoing obligations to suppliers. Budgeting (C) is also a valid module in Dynamics 365 Finance, providing budget planning, budget control, and budget register entries. Customer relationship management (B) belongs to Dynamics 365 Sales/Customer Engagement, not Finance. Project management (D) is not a standalone Finance module; project accounting exists but is not named "Project management" as a Finance module. Power Apps (E) is a Microsoft Power Platform service, not a Dynamics 365 Finance module.

Answer

Customer relationship management

Answer

Project management

Answer

Power Apps

Question 12

Your organization is implementing Dynamics 365 Finance. They need to ensure that financial transactions comply with local regulatory requirements for electronic invoicing. Which feature should they use?

Accepted Answer

Electronic reporting (ER). Electronic reporting (ER) in Dynamics 365 Finance is a configurable tool that supports the creation and management of electronic documents, including invoices, for regulatory compliance. It allows organizations to define formats that meet local e-invoicing requirements without custom code, and it supports multiple countries and formats. This makes it the correct feature for ensuring financial transactions comply with local electronic invoicing regulations.

Answer

Payment formats

Answer

Financial reporting

Answer

Data management

Question 13

A company uses Dynamics 365 Finance. The finance team notices that the general ledger balances do not match the subsidiary ledger balances for accounts payable. What should they investigate first?

Accepted Answer

Unposted vendor invoices and payments. The most likely cause of a mismatch between general ledger and subsidiary ledger balances for accounts payable is unposted vendor invoices and payments. These transactions are recorded in the subsidiary ledger but not yet posted to the general ledger, causing a temporary difference. Investigating unposted items is the first step.

Answer

The audit trail of posted transactions

Answer

The process automation framework

Answer

The posting profiles for vendors

Question 14

Your organization needs to automate the process of sending payment remittance advice to vendors after payments are made. Which Dynamics 365 Finance feature should be configured?

Accepted Answer

Vendor payment journal. In Dynamics 365 Finance, the vendor payment journal is used to record and post payments to vendors. It includes functionality to generate and send remittance advice to vendors after payment is made. The remittance advice can be configured to be sent via email, print, or electronic format. The other options do not directly handle the automation of sending remittance advice after payment.

Answer

Purchase order

Answer

Vendor invoice journal

Answer

Payment format

Question 15

A multinational company uses Dynamics 365 Finance with multiple legal entities. They want to process intercompany transactions automatically. What should they configure?

Accepted Answer

Intercompany accounting. Intercompany accounting in Dynamics 365 Finance enables automatic processing of transactions between legal entities within the same organization. It allows you to set up relationships, define accounts, and automate the creation of offsetting entries, ensuring accurate and efficient intercompany transactions.

Answer

Elimination rules

Answer

Consolidations

Answer

Transfer orders