MB-920 Describe Dynamics 365 Finance Practice Test 2 — 15 Questions

Question 1

A company uses Dynamics 365 Finance. The accounts payable manager wants to automate the process of matching purchase orders, product receipts, and vendor invoices. Which feature should they use?

Accepted Answer

Accounts payable invoice matching. Correct: Accounts payable invoice matching automates the three-way matching process. Option A (Vendor collaboration) is for communication, not matching. Option C (Budget control) manages budgets. Option D (Fixed assets) manages asset lifecycle.

Answer

Vendor collaboration

Answer

Budget control

Answer

Fixed assets management

Question 2

A retail company uses Dynamics 365 Finance. The finance team needs to generate financial statements that comply with local regulatory requirements in multiple countries. Which module should they use?

Accepted Answer

Financial reporting. Correct: Financial reporting is designed to create regulatory-compliant financial statements. Option A (General ledger) is the core ledger but not for reporting. Option C (Cash and bank management) handles bank transactions. Option D (Expense management) manages employee expenses.

Answer

Expense management

Answer

Cash and bank management

Answer

General ledger

Question 3

A multinational organization uses Dynamics 365 Finance. They need to consolidate financial data from subsidiaries that use different currencies and accounting standards. The consolidation must be performed automatically on a monthly basis. What should they configure?

Accepted Answer

Consolidation and currency translation. Correct: Consolidation [elimination] and currency translation are the key features for multi-currency, multi-standard consolidation. Option A (Intercompany accounting) handles transactions between entities but not automatic consolidation. Option B (Budget planning) is for budgeting. Option D (Fixed assets) is irrelevant.

Answer

Fixed assets management

Answer

Intercompany accounting

Answer

Budget planning

Question 4

A company is implementing Dynamics 365 Finance. They want to use AI to automatically classify vendor invoices and extract key data. Which feature should they enable?

Accepted Answer

AI Builder for invoice processing. AI Builder for invoice processing is the correct feature because it uses prebuilt AI models to automatically classify vendor invoices and extract key data such as invoice number, date, and line items directly within Dynamics 365 Finance. This capability leverages Microsoft's AI Builder, which integrates with Power Automate and Dataverse to process invoices without custom development, aligning with the requirement for AI-driven automation.

Answer

Vendor collaboration

Answer

Optical character recognition (OCR) service

Answer

Power BI reports

Question 5

A manufacturing company uses Dynamics 365 Finance. They need to track the cost of raw materials and finished goods across multiple production stages. Which costing method should they use?

Accepted Answer

Standard costing. Correct: Standard costing uses predetermined costs for materials and labor, suitable for manufacturing cost tracking. Option A (FIFO) is an inventory valuation method. Option C (Moving average) is another valuation method. Option D (LIFO) is not supported in Dynamics 365 Finance.

Answer

Moving average

Answer

Last in, first out (LIFO)

Answer

First in, first out (FIFO)

Question 6

An organization uses Dynamics 365 Finance. The finance team notices that the 'Purchase order' workflow is not triggering correctly for certain vendors. They suspect it's due to conditions in the workflow configuration. Where should they diagnose the workflow condition logic?

Accepted Answer

Purchase order workflow editor. Correct: Workflow configuration can be reviewed in the workflow editor. Option A (Vendor master) does not show workflow logic. Option C (Power Automate) is for external automation, not native workflows. Option D (System administration) is for system settings.

Answer

Power Automate flows

Answer

System administration parameters

Answer

Vendor master form

Question 7

A company uses Dynamics 365 Finance. The tax accountant needs to configure value-added tax (VAT) codes for multiple jurisdictions. Where should they set up the VAT rates?

Accepted Answer

Sales tax codes. In Dynamics 365 Finance, value-added tax (VAT) rates are configured using sales tax codes, which are set up in the Tax module, not in General ledger, Accounts payable, or Inventory management parameters. The sales tax code defines the tax rate and calculation method for each jurisdiction, and it is the standard location for VAT rate setup across all modules.

Answer

General ledger parameters

Answer

Accounts payable parameters

Answer

Inventory management parameters

Question 8

A company uses Dynamics 365 Finance. They want to enable Copilot to assist with generating financial reports and answering questions about financial data. What must be configured first?

Accepted Answer

Copilot in Dynamics 365 Finance. Correct: Copilot capabilities require enabling in Power Platform admin center. Option A (Finance Insights) is a separate AI feature. Option C (Power BI) is not required. Option D (Data management) is for integration.

Answer

Data management framework

Answer

Power BI embedded

Answer

Finance Insights module

Question 9

An organization using Dynamics 365 Finance receives an error when trying to post a vendor invoice: 'Invoice total does not match the expected amount based on the purchase order.' The purchase order has been partially received. What is the most likely cause?

Accepted Answer

The invoice quantity exceeds the received quantity. Correct: Invoice matching validates amounts against purchase order and receipts. Partial receipt causes mismatch. Option A (Currency) would give a different error. Option C (Vendor block) would prevent posting entirely. Option D (Workflow) would not cause this error.

Answer

The invoice is not yet approved in workflow

Answer

The vendor is blocked for posting

Answer

The invoice currency differs from the purchase order currency

Question 10

Which TWO of the following are capabilities of Dynamics 365 Finance? (Choose two.)

Accepted Answer

Fixed asset management. Correct: A and D. Budget control is a core feature; Fixed asset management is also part of Finance. Option B (Customer service) is a Dynamics 365 Sales/Service module. Option C (Project scheduling) is in Project Operations. Option E (Marketing automation) is in Dynamics 365 Marketing.

Answer

Project scheduling

Answer

Marketing automation

Answer

Customer service management

Question 11

Which THREE of the following are valid configuration options for posting profiles in Dynamics 365 Finance? (Choose three.)

Accepted Answer

Ledger posting setup. Correct: A, B, and D. Posting profiles define how transactions post to the general ledger. Option C (Customer posting profile) is a separate setup for accounts receivable. Option E (Inventory posting profile) is also separate.

Answer

Customer posting profile

Answer

Inventory posting profile

Question 12

Which TWO of the following are features of Dynamics 365 Finance that support compliance with regulatory requirements? (Choose two.)

Accepted Answer

Financial reporting. Correct: B and D. Audit trail tracks changes; Financial reporting generates compliant statements. Option A (Vendor collaboration) is not compliance-specific. Option C (Cash flow forecasting) is for planning. Option E (Expense management) is for employee expenses.

Answer

Vendor collaboration

Answer

Expense management

Answer

Cash flow forecasting

Question 13

Refer to the exhibit. The JSON shows the configuration for a currency exchange rate in Dynamics 365 Finance. A user reports that when posting a sales invoice in EUR, the system does not automatically convert to USD using the rate shown. What is the most likely reason?

Accepted Answer

The ExchangeRateType is set to Average, which is not used for automatic conversion. Correct: The exchange rate type 'Average' is not used for automatic conversion; 'Spot' or 'Daily' typically are. Option A (Currency code) is correct. Option C (Date) is valid. Option D (Rate) is valid.

Answer

The CurrencyCode is set to USD instead of EUR

Answer

The ExchangeRateDate is in the future

Answer

The ExchangeRate is not within the allowed tolerance

Question 14

Refer to the exhibit. A user in the USMF legal entity tries to post a journal entry in the General ledger for fiscal year 2025 but receives an error. What is the most likely cause based on the exhibit?

Accepted Answer

The period status for 2025 is set to Closed. Correct: The period status is 'Closed', preventing posting. Option A (Legal entity) is valid. Option B (Module) is correct. Option D (Action) is standard.

Answer

The module is set to GeneralLedger instead of AccountsPayable

Answer

The legal entity USMF is not configured for general ledger posting

Answer

The fiscal calendar year 2025 is not yet opened

Question 15

Refer to the exhibit. The configuration shows a budget in Dynamics 365 Finance. The budget manager wants to create a revised budget based on the original but cannot modify the existing record. What should they do?

Accepted Answer

Create a new budget scenario for the revision. Correct: To create a revision, a new budget scenario like 'Revision' should be used. Option A (Status) is already approved. Option B (Model) is valid. Option C (Type) is correct.

Answer

Change the BudgetStatus to Draft to allow editing

Answer

Delete the existing budget and recreate it with changes

Answer

Modify the BudgetModel to include the changes