MB-920 Describe Dynamics 365 Finance Practice Test 23 — 15 Questions

Question 1

A company is implementing Dynamics 365 Finance. The controller wants to ensure that when a sales order invoice is posted, the system automatically creates the corresponding general ledger entries without manual intervention. Which feature should the consultant configure to meet this requirement?

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

Accepted Answer

Posting profiles. Posting profiles in Dynamics 365 Finance define the main accounts used when subledger transactions are posted to the general ledger. They are essential for automating the posting of sales order invoices. Without a properly configured posting profile, the system cannot generate the correct ledger entries automatically, and manual intervention would be required.

Answer

Chart of accounts

Answer

Financial dimensions

Answer

Accounting source explorer

Question 2

A company uses Dynamics 365 Finance. The accounting manager needs to reverse a posted general ledger journal that incorrectly recorded an expense. The reversal must occur in the same period and use the same date. Which reversal method should the manager use?

Accepted Answer

Reversing entry with the original date. Dynamics 365 Finance allows reversing a posted journal by creating a reversing entry with the original date, which keeps the reversal in the same period. Reversing with a new date or in the next period changes the accounting period. A credit note journal is for customer credits, not general ledger reversals. Thus, reversing with the original date is the correct method.

Answer

Reversing entry with a new date in the current period

Answer

Credit note journal

Answer

Reversing entry with a date in the next period

Question 3

A company uses Dynamics 365 Finance and needs to allocate rent expenses across multiple departments based on each department's square footage. The allocation must be recalculated monthly. Which feature should they use?

Accepted Answer

Ledger allocation rules. Ledger allocation rules are designed to distribute amounts from one or more source accounts to destination accounts based on a definable basis. By using a statistical account that holds square footage per department, the rule can calculate each department's share. The rule can be run monthly to recalculate and post the allocations, ensuring accurate expense distribution.

Answer

Budget control

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Accrual schemes

Answer

Financial dimensions

Question 4

A company uses Dynamics 365 Finance and needs to allocate indirect costs, such as utilities, from a cost center to multiple departments based on a defined percentage. They want the allocation to occur automatically when the original expense is posted. Which feature should they use?

Accepted Answer

Ledger allocation rules. Ledger allocation rules are designed to automatically distribute amounts from a source to destinations using a basis such as percentage. They can be integrated with posting to run automatically. Financial dimensions, budget control, and accrual schemes serve different purposes and do not perform cost allocation, making ledger allocation rules the correct choice.

Answer

Accrual schemes

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Financial dimensions

Answer

Budget control

Question 5

A consulting firm uses Dynamics 365 Finance to manage multiple legal entities. The finance manager needs to allocate shared overhead costs from a central cost center to several regional cost centers at the end of each month. The allocation must be based on fixed percentages. Which feature should the consultant use?

Accepted Answer

Ledger allocation rules. Ledger allocation rules are specifically designed to distribute amounts from a source account to destination accounts based on a basis such as fixed percentages, quantities, or amounts. They support periodic allocations and can be run on a schedule. This makes them the correct choice for allocating shared overhead costs from a central cost center to regional cost centers.

Answer

Budget control

Answer

Financial dimensions

Answer

Intercompany accounting

Question 6

A Dynamics 365 Finance user needs to prevent a purchase order from being confirmed if the total amount exceeds the available budget for the cost center. Which feature should be enabled?

Accepted Answer

Budget control. Budget control is the feature that checks available budget funds before allowing a transaction to proceed. By configuring budget control for purchase orders and specifying the cost center as a budget dimension, the system will verify that the purchase order amount does not exceed the remaining budget. If it does, confirmation is blocked, and the user is alerted.

Answer

Encumbrance accounting

Answer

Budgeting workflows

Answer

Purchase order workflows

Question 7

A company uses Dynamics 365 Finance. The controller needs to track financial activity by department and by project for reporting purposes. Which two components should the controller configure to achieve this? (Choose two.)

Accepted Answer

Financial dimensions. To track financial activity by department and project, the controller must configure financial dimensions for those segments and include them in an account structure. The chart of accounts defines main accounts, the fiscal calendar defines periods, and budget control checks fund availability. Only financial dimensions and account structures provide the required segmentation for reporting.

Answer

Fiscal calendar

Answer

Chart of accounts

Answer

Budget control

Question 8

A company uses Dynamics 365 Finance. The controller needs to see a real-time summary of outstanding customer balances by aging period, without running a report. Which workspace should the controller use?

Accepted Answer

Customer credit and collections workspace. The Customer credit and collections workspace provides real-time visibility into customer balances, aging periods, and collection status. It is purpose-built for monitoring receivables, so the controller can review outstanding customer balances without running a separate report. The other workspaces target different processes such as period close, vendor collaboration, or electronic reporting formats.

Answer

Vendor collaboration workspace

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General ledger workspace

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Electronic reporting workspace

Question 9

A Dynamics 365 Finance user is setting up a new legal entity and needs to define the account structure. Which two components are required to create an account structure? (Choose two.)

Accepted Answer

Main accounts. An account structure in Dynamics 365 Finance must include main accounts and at least one financial dimension. These two components define the valid combinations for posting. Advanced rules, account aliases, and the ledger calendar are either optional or serve different purposes, so they are not required for creating the account structure itself.

Answer

Advanced rules

Answer

Account aliases

Answer

Ledger calendar

Question 10

A company uses Dynamics 365 Finance. The accounts payable manager needs to ensure that vendor payments are automatically generated for invoices that are due within the next 30 days, and that the payments are created in a batch job that runs nightly. Which feature should be configured to achieve this?

Accepted Answer

Vendor payment proposal. The vendor payment proposal feature allows you to select invoices based on criteria such as due date and generate payments. It can be configured to include invoices due within a specified number of days and can be run as a batch job. This automates the payment generation process, ensuring timely payments without manual intervention.

Answer

Vendor invoice workflow

Answer

Vendor groups

Answer

Payment schedule

Question 11

A retail company is implementing Dynamics 365 Finance. The controller wants to ensure that every time a sales order invoice is posted, the system automatically creates the corresponding customer ledger entries and updates the general ledger without manual intervention. Which core capability of Dynamics 365 Finance should the controller emphasize to the implementation team?

Accepted Answer

Integration with the general ledger through automatic postings. Dynamics 365 Finance uses posting profiles and ledger integration to automatically create general ledger entries when subledger transactions like sales order invoices are posted. This eliminates manual journal entries and ensures financial data is always current. The other options describe manual or disconnected processes that contradict the system's core design and would not meet the controller's requirement.

Answer

Separate accounts receivable module disconnected from the general ledger

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Batch processing that posts invoices only at month-end

Answer

Manual journal entry creation for each sales invoice

Question 12

A company is implementing Dynamics 365 Finance. The controller wants to ensure that when a sales order invoice is posted, the system automatically creates the corresponding general ledger entries without manual intervention. Which feature should the consultant configure to meet this requirement?

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

Accepted Answer

Foreign currency revaluation. Recurring journals automate the creation of repetitive entries, such as monthly accruals or allocations, saving time and reducing errors. Foreign currency revaluation adjusts open foreign currency transactions to current exchange rates, posting unrealized gains/losses. Together, they streamline the month-end close by automating entries and ensuring accurate currency valuation.

Answer

Ledger calendar

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Allocation rules

Answer

Financial dimensions

Question 13

A company uses Dynamics 365 Finance and has a legal entity that requires intercompany transactions to be automatically recorded in both the originating and destination legal entities. They want to ensure that the due-to and due-from accounts are balanced. Which feature should they configure?

Accepted Answer

Intercompany accounting. Intercompany accounting is the feature that automates transactions between legal entities, using due-to and due-from accounts to ensure balance. It allows a single transaction to be recorded in multiple entities, simplifying reconciliation. Other features like dimensions or consolidation do not provide this automatic cross-entity posting.

Answer

Accounts payable workflows

Answer

Financial dimensions

Answer

Ledger consolidation

Question 14

A company uses Dynamics 365 Finance. The accounting manager wants to prevent users from posting journal entries to a specific main account for a defined date range without changing the account's normal configuration. Which feature should the manager use?

Accepted Answer

Posting restrictions on the main account. Main accounts include a posting restriction setting that can block manual entry and can be time-bound with start and end dates. This is exactly what allows the manager to stop journal entries for a defined period without permanently changing account behavior. Categories, account structures, and advanced ledger entries serve different purposes and cannot enforce a temporary date-range posting block.

Answer

Advanced ledger entries

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Main account categories

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Account structures

Question 15

A company uses Dynamics 365 Finance. The finance team needs to track the financial impact of a new product line across multiple dimensions, including department, cost center, and region. They want to ensure that when a journal entry is posted, the system validates that the combination of dimensions is allowed. Which feature should be configured?

Accepted Answer

Account structures. Account structures define the valid combinations of main accounts and financial dimensions. They are used to enforce data entry validation, ensuring that only allowed dimension combinations are posted. By setting up an account structure that includes department, cost center, and region, the finance team can validate that these dimensions are used correctly for the new product line.

Answer

Dimension value translations

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Financial dimension sets

Answer

Advanced rules