MB-920 Describe Dynamics 365 Finance Practice Test 3 — 15 Questions

Question 1

A manufacturing company uses Dynamics 365 Finance. The finance team notices that the general ledger balances do not match the subledger details for accounts payable. What should you troubleshoot first?

Accepted Answer

Run the 'Troubleshoot GL balance' report in Accounts payable.. Option A is correct because the 'Troubleshoot GL balance' report identifies discrepancies between the general ledger and subledger. Option B is wrong because periodic settlement processes are for vendor payments. Option C is wrong because invoice approval workflow affects approval, not balances. Option D is wrong because the payment journal report shows payments, not balances.

Answer

Check the invoice approval workflow configuration.

Answer

Review the vendor payment settlement process.

Answer

Re-run the payment journal report.

Question 2

A company wants to automate the reconciliation of bank transactions with general ledger entries in Dynamics 365 Finance. Which feature should they use?

Accepted Answer

Advanced bank reconciliation. Option B is correct because the 'Advanced bank reconciliation' feature automatically matches bank statements with ledger entries. Option A is wrong because the payment proposal generates payments, not reconciliations. Option C is wrong because the cash flow forecast predicts cash flow. Option D is wrong because the budget control process manages budgets.

Answer

Cash flow forecast

Answer

Budget control

Answer

Payment proposal

Question 3

An organization is implementing Dynamics 365 Finance and must configure a fiscal calendar that aligns with a 4-4-5 retail calendar. Which approach should they use?

Accepted Answer

Create a custom period template based on the 4-4-5 pattern.. Option D is correct because Dynamics 365 Finance supports custom period templates like 4-4-5. Option A is wrong because the standard calendar is 12 months. Option B is wrong because fiscal year date intervals define date ranges, not period patterns. Option C is wrong because the period close template manages closing processes.

Answer

Define fiscal year date intervals.

Answer

Use the standard calendar and manually adjust periods each year.

Answer

Use the period close template.

Question 4

A company uses Dynamics 365 Finance and needs to track expenses by department and project simultaneously. Which financial dimension configuration should they use?

Accepted Answer

Add Department and Project as financial dimensions to the main account.. Option A is correct because 'Department' and 'Project' are financial dimensions that can be used together. Option B is wrong because cost centers and cost objects are for cost accounting. Option C is wrong because main accounts and subaccounts are for chart of accounts. Option D is wrong because budget codes and budget classes are for budgeting.

Answer

Create separate cost centers and cost objects.

Answer

Use main accounts and subaccounts.

Answer

Configure budget codes and budget classes.

Question 5

Which TWO of the following are features of Dynamics 365 Finance?

Accepted Answer

Credit and collections management. Options A and C are correct. A: Budget planning is a core feature. C: Credit and collections management is part of accounts receivable. Options B, D, and E are incorrect: B is a Power Platform feature, D is a supply chain feature, E is a commerce feature.

Answer

Power BI dashboards

Answer

Warehouse management

Answer

Omnichannel order management

Question 6

Which THREE of the following are valid configurations for intercompany accounting in Dynamics 365 Finance?

Accepted Answer

Elimination rules can be defined to automatically remove intercompany transactions during consolidation.. Options B, C, and D are correct. B: Intercompany transactions can include sales orders and purchase orders. C: Elimination rules are used to remove intercompany transactions from consolidated financials. D: Intercompany journals can be posted automatically. Options A and E are incorrect: A is not valid because intercompany accounting does not require separate legal entities for each transaction; E is wrong because intercompany accounting supports multiple currencies.

Answer

Intercompany transactions must use the same currency.

Answer

Each intercompany transaction must be posted to a separate legal entity.

Question 7

Which TWO of the following are capabilities of the General ledger in Dynamics 365 Finance?

Accepted Answer

Chart of accounts management. The General ledger in Dynamics 365 Finance is the central repository for financial data, and its core capabilities include managing the Chart of accounts (D) and supporting Multi-currency accounting (E). The Chart of accounts defines the financial structure of an organization, allowing for the creation and maintenance of main accounts, dimensions, and account structures. Multi-currency accounting enables transactions to be recorded and reported in multiple currencies, with automatic exchange rate calculations and revaluation, which is fundamental to the General ledger's role.

Answer

Asset depreciation calculation

Answer

Invoice matching

Answer

Budget cycle management

Question 8

Refer to the exhibit. A Dynamics 365 Finance system has a tax code configured as shown. A sales invoice line item has a unit price of 100.00 (excluding tax) and the tax code applies. What is the total invoice line amount including tax?

Accepted Answer

119.00. Option C is correct. The 'WholeAmount' tax calculation method calculates tax on the total line amount, then adds it. Tax = 100.00 * 0.19 = 19.00; total = 119.00. Option A is wrong because it assumes no tax. Option B is wrong because it uses wrong rate. Option D is wrong because it doubles the tax.

Answer

110.00

Answer

138.00

Answer

100.00

Question 9

Refer to the exhibit. A fixed asset is configured as shown. What is the depreciation amount for the first year (2025) if the company uses a half-year convention?

Accepted Answer

10000.00. Option C is correct. 200% declining balance doubles straight-line rate. Straight-line rate = 1/5 = 20%. Double = 40%. First year with half-year convention: 50000 * 40% * 0.5 = 10000. Option A is wrong because it ignores half-year convention. Option B is wrong because it uses straight-line. Option D is wrong because it uses full year double declining after half-year.

Answer

20000.00

Answer

12000.00

Answer

10000.00 (straight-line)

Question 10

Refer to the exhibit. An accounts payable invoice journal is configured as shown. A user posts an invoice for 1000.00 with vendor account V1001. Which account is credited?

Accepted Answer

Default offset account 200110. Option B is correct. The invoice register journal credits the default offset account (200110) temporarily. Later, when the invoice is approved, the credit is moved to the vendor account. Option A is wrong because the vendor account is not credited in the register. Option C is wrong because there is no separate vendor balance account. Option D is wrong because the debit goes to an expense account, not credit.

Answer

Vendor account V1001

Answer

Expense account

Answer

Vendor balance account

Question 11

A company uses Dynamics 365 Finance. The finance team needs to automate the reconciliation of bank transactions with posted payments. Which feature should they use?

Accepted Answer

Bank reconciliation automation. Option D is correct because bank reconciliation automation allows automatic matching of bank transactions with posted payments. Option A is wrong because ledger settlements manually clear debits and credits. Option B is wrong because advanced bank reconciliation is a manual process. Option C is wrong because payment proposals are for creating payments, not reconciliation.

Answer

Advanced bank reconciliation

Answer

Payment proposal

Answer

Ledger settlements

Question 12

A manufacturing company uses Dynamics 365 Finance and Supply Chain Management. The finance department wants to allocate overhead costs to production orders based on machine hours. Which costing method should they configure?

Accepted Answer

Absorption costing. Option C is correct because absorption costing uses predetermined overhead rates based on machine hours. Option A is wrong because variable costing only includes variable costs. Option B is wrong because standard costing uses standard rates but not specifically for overhead allocation. Option D is wrong because job costing tracks costs per job but not overhead allocation.

Answer

Variable costing

Answer

Standard costing

Answer

Job costing

Question 13

A company uses Dynamics 365 Finance with multiple legal entities. The finance team needs to enforce a consistent chart of accounts across all entities. Which feature should they use?

Accepted Answer

Shared chart of accounts. Option B is correct because shared chart of accounts allows a single chart of accounts to be used across legal entities. Option A is wrong because financial dimensions are for segmentation, not enforcement. Option C is wrong because each legal entity can have its own chart of accounts. Option D is wrong because main accounts are part of the chart but not the enforcement mechanism.

Answer

Financial dimensions

Answer

Legal entity override

Answer

Main account categories

Question 14

A company uses Dynamics 365 Finance. The accounts payable team needs to automatically calculate discounts based on payment terms when entering vendor invoices. Where should they configure the discount?

Accepted Answer

Payment terms. Option C is correct because cash discounts are configured at the vendor payment terms level and automatically applied during invoice entry. Option A is wrong because invoice policies are for approval, not discounts. Option B is wrong because vendor master only stores company details. Option D is wrong because procurement categories are for item classification.

Answer

Procurement categories

Answer

Invoice policies

Answer

Vendor master

Question 15

A company uses Dynamics 365 Finance and wants to track budget funds availability before posting purchase orders. Which budget control configuration must be enabled?

Accepted Answer

Budget control. Option A is correct because budget control must be enabled and configured to check funds availability for purchase orders. Option B is wrong because budget plans are for planning, not control. Option C is wrong because budget register entries record budgets, not control. Option D is wrong because budget models are used in planning.

Answer

Budget plan

Answer

Budget register entry

Answer

Budget model