MB-920 Describe Dynamics 365 Finance Practice Test 17 — 15 Questions

Question 1

A manufacturing company uses Dynamics 365 Finance. The procurement team notices that purchase order (PO) approvals are taking too long because managers are frequently out of office. They want to configure a fallback approval process. What should you do?

Accepted Answer

Configure an alternate approver or escalation step in the purchase order approval workflow.. Option C is correct because Dynamics 365 Finance allows you to configure alternate approver or escalation rules in the approval workflow, ensuring that when primary approvers are unavailable, the workflow routes to a designated fallback. Option A is wrong because Microsoft Power Automate can be used but is not the native built-in method. Option B is wrong because reassigning manually is not an automated fallback. Option D is wrong because workflow history does not provide fallback.

Answer

Instruct managers to delegate their approvals to a colleague before leaving.

Answer

Use the workflow history to identify pending approvals and reassign them.

Answer

Create a Microsoft Power Automate flow to reassign the PO when the manager is out of office.

Question 2

Your organization is configuring a purchase order approval workflow in Dynamics 365 Finance. The exhibit shows a JSON representation of the workflow step. After implementation, POs are automatically approved when the manager does not act within 48 hours, bypassing the intended VP of Procurement. What is the most likely cause?

Accepted Answer

The escalation action is set to 'Approve' instead of 'Escalate'.. Option D is correct because the 'escalationAction' is set to 'Approve', which means when the time limit is exceeded, the system automatically approves the PO instead of routing to the fallback approver. To route to the VP, the escalationAction should be 'Escalate' or similar. Option A is wrong because the fallback is defined as VP of Procurement. Option B is wrong because the time limit is 48 hours. Option C is wrong because the assignee is Manager.

Answer

The time limit is set to 48 hours.

Answer

The fallback approver is set to VP of Procurement.

Answer

The assignee is set to Manager.

Question 3

A company uses Dynamics 365 Finance for financial management. The CFO wants to use AI to predict customer payment delays and recommend proactive actions. Which feature should you use?

Accepted Answer

Customer payment predictions. Option B is correct because Dynamics 365 Finance includes AI-driven customer payment predictions that provide insights and recommendations. Option A is wrong because Copilot in Finance is for conversational assistance, not specifically payment predictions. Option C is wrong because the cash flow forecasting feature does not include customer payment delay predictions. Option D is wrong because budgeting and planning is for budget creation.

Answer

Cash flow forecasting

Answer

Microsoft Copilot in Finance

Answer

Budgeting and planning

Question 4

Your organization is implementing Dynamics 365 Finance and needs to ensure that intercompany transactions are automatically reconciled. Which setup is required?

Accepted Answer

Set up intercompany accounting and define intercompany partners.. Option A is correct because intercompany accounting setup defines the rules for automatic posting and reconciliation of intercompany transactions. Option B is wrong because consolidation is for combining financial statements of multiple legal entities, not for intercompany reconciliation. Option C is wrong because elimination rules are part of consolidation to remove intercompany balances. Option D is wrong because allocation rules are for distributing costs.

Answer

Define elimination rules for intercompany transactions.

Answer

Create allocation rules for intercompany charges.

Answer

Configure consolidation processes.

Question 5

A company uses Dynamics 365 Finance with dual-currency accounting. They have transactions in both USD and EUR. The general ledger is set to USD, but a user posts a vendor invoice in EUR without specifying an exchange rate. The system posts the invoice at a rate of 0. The next day, the exchange rate for EUR/USD is 1.10. What is the impact on the general ledger?

Accepted Answer

The invoice is posted with a zero USD amount, causing an imbalance.. Option C is correct because when the exchange rate is not provided, the system uses the default rate, which could be zero if not configured. The zero rate leads to a zero USD amount, causing an imbalance. The user must correct the invoice with the correct rate. Option A is wrong because the system does not automatically update the rate after posting. Option B is wrong because the system does not reject the invoice; it posts with zero. Option D is wrong because the exchange rate difference is not automatically calculated without a rate.

Answer

The system rejects the invoice due to a missing exchange rate.

Answer

The system automatically updates the invoice using the next day's rate of 1.10.

Answer

The system posts the invoice and creates an exchange rate difference journal.

Question 6

A retail company uses Dynamics 365 Finance for financial operations. They want to automate the process of posting daily sales to the general ledger. Which feature should they use?

Accepted Answer

Create a batch job to post sales orders automatically.. Option A is correct because Dynamics 365 Finance includes a batch job for posting sales orders and invoices automatically. Option B is wrong because recurring invoices are for regular customer invoices, not sales aggregation. Option C is wrong because the general journal is for manual adjustments. Option D is wrong because the payment journal is for recording payments.

Answer

Use the recurring invoice functionality.

Answer

Post a general journal with the total sales amount.

Answer

Set up a payment journal for daily sales.

Question 7

Your organization uses Dynamics 365 Finance and needs to track expenses by project for a construction project. Which module and configuration should you use?

Accepted Answer

Project management and accounting module with cost categories and budgets.. Option B is correct because the Project management and accounting module provides cost tracking and invoicing for projects, with expense categories and budgets. Option A is wrong because the Expense management module is for employee expense reports, not project cost tracking. Option C is wrong because the Budgeting module is for financial budgets, not project-specific cost tracking. Option D is wrong because the Fixed assets module is for asset management.

Answer

Fixed assets module with asset tracking.

Answer

Budgeting module with budget control.

Answer

Expense management module with expense categories.

Question 8

A company wants to use Dynamics 365 Finance to manage its cash flow. Which feature allows them to forecast future cash positions based on historical data and expected payments?

Accepted Answer

Cash flow forecasting. Option C is correct because the cash flow forecasting feature in Dynamics 365 Finance uses historical and expected data to predict cash positions. Option A is wrong because payment schedules are for installment payments. Option B is wrong because the bank reconciliation module reconciles statements, not forecasts. Option D is wrong because the general ledger is for posting transactions, not forecasting.

Answer

General ledger

Answer

Bank reconciliation

Answer

Payment schedules

Question 9

A multinational company uses Dynamics 365 Finance with multiple legal entities. They want to streamline intercompany invoicing by automatically creating invoices for intercompany purchases when a purchase order is confirmed. What configuration is required?

Accepted Answer

Configure intercompany parameters to automatically post invoices on purchase order confirmation.. Option B is correct because the intercompany setup in Dynamics 365 Finance includes a setting to automatically create intercompany invoices when purchase orders are confirmed. Option A is wrong because recurring invoices are for regular customer invoices, not intercompany. Option C is wrong because purchase agreements are for long-term contracts, not automatic intercompany invoicing. Option D is wrong because vendor invoices are for external purchases.

Answer

Use vendor invoices to manually record intercompany transactions.

Answer

Create a purchase agreement between legal entities.

Answer

Set up recurring invoices for each intercompany relationship.

Question 10

Which TWO of the following are true about the general journal in Dynamics 365 Finance?

Accepted Answer

They can be used to post adjustments and accruals.. Option A is correct because general journals are used for non-standard transactions. Option B is correct because you can set up approval workflows for general journals. Option C is wrong because general journals do not automatically post to subledgers; subledger posting is done through dedicated modules. Option D is wrong because reversing entries are available in journals like the general journal. Option E is wrong because general journals support multiple legal entities in one journal.

Answer

They automatically post to subledgers like Accounts Payable.

Answer

They cannot be reversed.

Answer

They can only be used for one legal entity at a time.

Question 11

Which THREE of the following are valid methods to reduce the number of vendor invoices posted manually in Dynamics 365 Finance?

Accepted Answer

Enable vendor collaboration for electronic invoice submission.. Option A is correct because OCR can capture invoice data automatically. Option B is correct because purchase order matching automates invoice posting. Option C is correct because vendor collaboration allows vendors to submit invoices electronically. Option D is wrong because manual posting is what you want to reduce. Option E is wrong because the payment journal does not automate invoice posting.

Answer

Use the payment journal to record invoices.

Answer

Manually enter all invoices to ensure accuracy.

Question 12

Which TWO of the following are core financial modules in Dynamics 365 Finance?

Accepted Answer

Accounts payable. Option B is correct because Accounts payable is a core module. Option D is correct because General ledger is the central module. Option A is wrong because Human resources is a separate app. Option C is wrong because Project management is a module but not core financial in the same sense. Option E is wrong because Sales and marketing is a separate app.

Answer

Sales and marketing

Answer

Human resources

Answer

Project management

Question 13

Contoso Ltd. is a global manufacturing company with legal entities in the US (USD), UK (GBP), and Germany (EUR). They use Dynamics 365 Finance. The CFO wants a consolidated financial report that combines data from all entities into USD, using month-end exchange rates. The consolidation must be performed monthly, and adjustments should be automatically eliminated. The company also needs to maintain separate accounting rules for each entity (e.g., GAAP vs. IFRS). You are tasked with configuring the consolidation process. What should you do?

Accepted Answer

Set up a consolidation group, define exchange rates, configure elimination rules, and run the consolidation process online.. Option B is correct because the consolidation module in Dynamics 365 Finance allows you to set up consolidation groups, define exchange rates, run consolidation online with elimination rules, and handle different accounting frameworks. Option A is wrong because intercompany accounting is for transactions between entities, not for consolidation reporting. Option C is wrong because the general journal is for manual adjustments, not automated consolidation. Option D is wrong because export/import is manual and not suitable for monthly consolidation.

Answer

Configure intercompany accounting and use the intercompany reconciliation report.

Answer

Export each entity's trial balance to Excel, apply exchange rates, and import to a consolidated company.

Answer

Create a general journal to manually post consolidated entries using exchange rates.

Question 14

Northwind Traders uses Dynamics 365 Finance for financial operations. They have a high volume of vendor invoices (5000 per month). Currently, invoices are manually entered into the system. The AP team is overwhelmed and making errors. The company wants to implement automation using AI to capture invoice data from PDFs and emails, and automatically match them to purchase orders. They also want to set up approval workflows for invoices that do not match. You are the Dynamics 365 consultant. What should you recommend?

Accepted Answer

Implement Microsoft Dynamics 365 Invoice capture to automatically extract invoice data and use PO matching with approval workflows.. Option A is correct because the Invoice capture add-in uses AI to extract data from PDFs and emails, and can be integrated with Dynamics 365 Finance. It supports PO matching and workflow. Option B is wrong because Power Automate alone cannot perform OCR/AI invoice capture. Option C is wrong because manual entry is what they want to avoid. Option D is wrong because vendor collaboration does not automate invoice extraction.

Answer

Hire temporary staff to enter invoices and use a batch posting job.

Answer

Enable vendor collaboration so vendors can enter invoices directly.

Answer

Use Microsoft Power Automate to process invoices and send them to the AP team for manual entry.

Question 15

A small business uses Dynamics 365 Finance for the first time. They have one legal entity, one currency (USD), and simple financial needs. They want to record daily sales, pay vendors, reconcile bank accounts, and generate financial statements. They have no intercompany transactions or complex manufacturing. You are setting up the system. What should you do to minimize configuration overhead?

Accepted Answer

Use the standard default configurations and only customize essential modules.. Option D is correct because using standard configurations for a single-entity scenario is the simplest and most efficient approach. Option A is wrong because the chart of accounts is required. Option B is wrong because multiple legal entities are not needed. Option C is wrong because intercompany setup is unnecessary.

Answer

Create a detailed chart of accounts with many segments for future expansion.

Answer

Set up multiple legal entities to separate financial data.

Answer

Configure intercompany accounting in case they expand later.