MB-920 Describe Dynamics 365 Finance Practice Test 22 — 15 Questions

Question 1

A company uses Dynamics 365 Finance and needs to track financial dimensions for their cost centers and departments across all transactions. They want to ensure that when a user enters a main account, only valid combinations of dimensions are allowed. Which feature should they configure?

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

Accepted Answer

Account structures. Account structures are the correct feature to define and enforce valid combinations of main accounts and financial dimensions. They ensure that only allowed dimension values are used when posting transactions, maintaining data integrity. Advanced rules can further refine the behavior but are not the primary mechanism for defining valid combinations.

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Financial dimension sets

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Advanced rules

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Dimension hierarchies

Question 2

A company uses Dynamics 365 Finance. The accounts payable manager needs to generate payments for multiple vendor invoices at once, ensuring that all invoices due within the next 30 days are included. Which feature should the manager use?

Accepted Answer

Payment proposal. A payment proposal is the correct feature for generating payments for multiple vendor invoices based on criteria such as due date. It allows the user to define selection criteria, review the proposed payments, and then create the payments. The vendor payment journal is for manual entry, the vendor invoice journal is for recording invoices, and settlement is for matching payments to invoices after payment.

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Settlement

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Vendor payment journal

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Vendor invoice journal

Question 3

A company is implementing Dynamics 365 Finance and needs to track the financial impact of its sustainability initiatives, such as carbon credits and environmental fees. Which module should they use to record and report these transactions?

Accepted Answer

General ledger. The General ledger module is the correct choice because it is the central repository for all financial transactions. By setting up specific main accounts and financial dimensions, a company can record carbon credits, environmental fees, and other sustainability-related entries. This enables accurate financial reporting and analysis of the initiatives' impact.

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Budgeting

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Accounts payable

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Fixed assets

Question 4

A multinational company uses Dynamics 365 Finance with multiple legal entities. The finance team wants to consolidate financial results from several subsidiaries into a single consolidation legal entity for reporting. They need to ensure that transactions are translated correctly when subsidiary currencies differ from the consolidation currency. Which feature should they configure to define the exchange rate types used during consolidation?

Accepted Answer

Currency exchange rate types. Currency exchange rate types define the rates used to translate foreign currency balances during consolidation. When subsidiaries use different currencies, the consolidation process relies on the configured exchange rate type to convert amounts into the consolidation legal entity's accounting currency. Consolidation accounts, dimension sets, and consolidation periods support the consolidation process but do not manage currency translation, making the exchange rate type the correct feature to configure.

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Consolidation periods

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Ledger consolidation accounts

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Financial dimension sets

Question 5

A global manufacturing company uses Dynamics 365 Finance. The controller must ensure that all intercompany transactions between two legal entities in the same organization are automatically recorded in both entities without manual duplicate entry. Which feature should be configured to meet this requirement?

Accepted Answer

Intercompany accounting. Intercompany accounting is designed to automatically create reciprocal entries in multiple legal entities when a single transaction is posted. It supports automatic balancing, reduces manual effort, and ensures both entities' books are accurate. Consolidation, dimensions, and shared charts of accounts serve other purposes and do not automate dual-entity recording, making intercompany accounting the correct feature for this scenario.

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Chart of accounts shared across entities

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Financial dimensions

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Consolidation accounts

Question 6

A company uses Dynamics 365 Finance. The accounting manager is configuring the general ledger and needs to ensure that when a user enters a transaction, the system automatically validates that the combination of main account and financial dimensions is valid according to the chart of accounts. Which component should the manager configure to achieve this?

Accepted Answer

Account structure. Account structures define which main accounts and financial dimensions can be combined and are used to validate transactions during entry. They are the primary mechanism for ensuring that only valid account and dimension combinations are posted. Advanced rules, financial dimensions, and the chart of accounts are related but do not perform this validation on their own.

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Advanced rule

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Financial dimension

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Chart of accounts

Question 7

A company using Dynamics 365 Finance wants to record all financial transactions in multiple currencies and automatically calculate exchange rate gains and losses. Which feature should they configure?

Accepted Answer

Currency exchange rate types and currency pairs. To record transactions in multiple currencies and automatically calculate exchange rate gains and losses, you must configure currency exchange rate types and currency pairs. These settings define the rates used when converting foreign currency transactions to the accounting currency and enable the system to compute realized and unrealized gains/losses during settlement or revaluation.

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Advanced ledger entries

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Financial dimensions

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Ledger allocation rules

Question 8

A company uses Dynamics 365 Finance and needs to track financial dimensions for their cost centers and departments across all transactions. They want to ensure that when a user enters a main account, only valid combinations of dimensions are allowed. Which feature should they configure?

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

Accepted Answer

Intercompany accounting. Intercompany accounting is the correct feature because it automates the creation of offsetting entries in multiple legal entities. By setting up intercompany relationships and accounts, the system ensures that when a transaction is entered in one entity, the corresponding due to/due from entries are generated in the other entity. This reduces manual effort and errors.

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Consolidation

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Financial dimensions

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Ledger calendar

Question 9

A company is implementing Dynamics 365 Finance and wants to use financial dimensions to track transactions by department and cost center across all legal entities. They need to understand which statements about financial dimensions are correct. (Choose two.)

Accepted Answer

Financial dimensions can be used in account structures to define valid account and dimension combinations.. Financial dimensions are shared across legal entities and can be incorporated into account structures to define valid combinations for posting. These two statements correctly describe how dimensions support cross-entity tracking of department and cost center. The other statements are false because dimensions do not replace the chart of accounts, are not limited to a single legal entity, and are used in transaction entry, not only for reporting.

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Financial dimensions are always limited to a single legal entity.

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Financial dimensions can be used only for reporting and not for transaction entry.

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Financial dimensions replace the need for a chart of accounts.

Question 10

A company is implementing Dynamics 365 Finance and wants to streamline the process of creating and posting recurring transactions such as monthly rent and insurance expenses. They need a feature that allows them to define a template and generate multiple journal entries on a schedule. What should they use?

Accepted Answer

Periodic journals. Periodic journals are specifically designed to automate recurring transactions by using a template and a recurrence schedule. They reduce manual effort and ensure consistency for expenses like rent and insurance. General journals are manual, accruals handle period matching, and vendor invoice journals are for payables, so periodic journals are the correct feature.

Answer

Vendor invoice journals

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General journals

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Ledger accruals

Question 11

A Dynamics 365 Finance user needs to ensure that a specific vendor invoice is approved by both the department manager and the finance controller before it can be posted. The approval order must be manager first, then controller. Which feature should be configured?

Accepted Answer

Vendor invoice workflow. A vendor invoice workflow is the correct feature because it enables you to define a sequence of approval tasks. You can configure the first approval by the department manager and the second by the finance controller. The invoice cannot be posted until the workflow completes successfully, ensuring the required order and authorization.

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Posting profiles

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Vendor collaboration workspace

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Invoice matching policy

Question 12

A company using Dynamics 365 Finance wants to ensure that all vendor invoices above $10,000 are automatically routed to the controller for approval before posting. The controller must also be able to see the invoice details and approve or reject it from within Dynamics 365. What should you configure?

Accepted Answer

Configure a workflow for Vendor invoice with an approval step and a condition for invoice total > 10000.. The Vendor invoice workflow is specifically designed to route pending vendor invoices for approval before posting. By adding a condition on the invoice total, only invoices exceeding $10,000 are routed to the controller. This ensures proper authorization and provides the controller with the ability to review and approve directly in Dynamics 365 Finance.

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Set up a workflow for Vendor invoice journal with an approval step and a condition for invoice total > 10000.

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Create a purchase order workflow with an approval step for purchase order total > 10000.

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Set up a manual journal approval workflow for General journal entries with a condition for amount > 10000.

Question 13

A company uses Dynamics 365 Finance. The accounting manager needs to ensure that when users enter journal entries, the system automatically validates that the total debits equal total credits before posting. Which feature should the manager configure?

Accepted Answer

Set up a journal name with a 'Balance' control type.. The correct answer is to set up a journal name with a 'Balance' control type. Journal names in Dynamics 365 Finance define critical validation settings, including whether a journal must balance. The Balance control ensures that total debits equal total credits before posting is allowed, directly meeting the manager's need for automatic validation during journal entry.

Answer

Set up a workflow for journal approval.

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Enable 'Budget control' on the main account.

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Configure a posting restriction on the legal entity.

Question 14

A company uses Dynamics 365 Finance and needs to track financial dimensions for their cost centers and departments across all transactions. They want to ensure that when a user enters a main account, only valid combinations of dimensions are allowed. Which feature should they configure?

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

Accepted Answer

Ledger allocation rule. Ledger allocation rules automatically distribute amounts from a source account to destination accounts using a basis such as a statistical account. By defining a rule that references the headcount statistical account, the finance team can allocate shared service center costs to departments at month-end. Accrual schemes, posting definitions, and budget control configuration serve different purposes and cannot perform this statistical-based cost allocation.

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Posting definition

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Accrual scheme

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Budget control configuration

Question 15

A Dynamics 365 Finance user needs to post a general journal that includes a line for a main account that is set up with a posting type of 'Balance sheet' and another line for a main account with a posting type of 'Profit and loss'. The user also wants to use a financial dimension to track the transaction by department. Which statement correctly describes the posting behavior?

Accepted Answer

The journal will post successfully if total debits equal total credits, regardless of account types.. The fundamental rule for posting a general journal in Dynamics 365 Finance is that total debits must equal total credits. Mixing balance sheet and profit and loss accounts is permitted. Financial dimensions do not require balancing unless explicitly configured on the main account. Therefore, the statement that the journal posts when debits equal credits is correct, while the others add invalid conditions.

Answer

The journal will post only if the financial dimension is balanced across all lines.

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The journal will fail because balance sheet and profit and loss accounts cannot be mixed in the same journal.

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The journal will post only if the balance sheet and profit and loss accounts balance by main account and financial dimension.