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

Question 1

Refer to the exhibit. A Dynamics 365 Finance analyst runs the KQL query shown against the FinanceTransactions table. What is the result?

Accepted Answer

Top 5 account categories by total amount for 2023. The KQL query uses `summarize` with `sum(Amount)` grouped by `AccountCategory`, then `top 5 by TotalAmount desc` to return the five account categories with the highest total amounts. The `where` clause filters transactions to the year 2023, so the result is the top 5 account categories by total amount for 2023. This matches option D exactly.

Answer

All account categories with their total amounts for 2023

Answer

Monthly total amounts for each account category in 2023

Answer

Top 5 account categories by total amount for 2024

Question 2

A manufacturing company uses Dynamics 365 Finance to manage its inventory. The company wants to ensure that the cost of raw materials is updated automatically when purchase orders are invoiced. Which costing method should the company use?

Accepted Answer

Moving average. Standard costing updates costs based on predetermined standards, not automatically from purchase invoices. Weighted average and moving average can update on invoice posting. FIFO tracks actual cost layers. Moving average is commonly used for real-time cost updates.

Answer

FIFO

Answer

Standard costing

Answer

Weighted average

Question 3

A company uses Dynamics 365 Finance to manage its fixed assets. The accountant needs to post a depreciation adjustment for a previous fiscal year that has already been closed. What should the accountant use?

Accepted Answer

Depreciation adjustment journal. The fixed asset journal is for routine transactions. Depreciation proposal posts planned depreciation. The depreciation adjustment journal is specifically for correcting prior year depreciation.

Answer

Fixed asset journal

Answer

General journal

Answer

Depreciation proposal

Question 4

A multinational corporation uses Dynamics 365 Finance with multiple legal entities. The controller wants to consolidate financial data from all subsidiaries into a single reporting entity. Which feature should be used to perform the consolidation?

Accepted Answer

Consolidate [Online]. Consolidate [Eliminate] is for intercompany eliminations. Consolidate [Inquire] is for viewing. Consolidate [Transfer] only moves data. Consolidate [Online] performs the actual consolidation.

Answer

Consolidate [Transfer]

Answer

Consolidate [Eliminate]

Answer

Consolidate [Inquire]

Question 5

A company uses Dynamics 365 Finance. Which TWO features are available in the Cash and Bank Management module?

Accepted Answer

Cash flow forecasting. Option A (Cash flow forecasting) is correct because the Cash and Bank Management module in Dynamics 365 Finance includes cash flow forecasting functionality, allowing users to project future cash positions based on ledger, vendor, customer, and bank transaction data. Option C (Bank reconciliation) is correct because the module provides bank reconciliation features, including importing bank statements and matching them against bank transactions to reconcile the bank account balance with the ledger. Option B (Vendor payments) is not part of Cash and Bank Management; vendor payment processing belongs to the Accounts Payable module. Option D (Budget control) is not part of Cash and Bank Management; it is configured in the Budgeting module. Option E (Fixed asset management) is not part of Cash and Bank Management; it is handled by the Fixed Assets module.

Answer

Vendor payments

Answer

Budget control

Answer

Fixed asset management

Question 6

A company uses Dynamics 365 Finance to manage intercompany transactions. Which THREE steps are required to set up intercompany accounting?

Accepted Answer

Define intercompany partners. Option B (Define intercompany partners) is correct because intercompany accounting in Dynamics 365 Finance requires you to designate each legal entity that will participate in intercompany transactions as an intercompany partner, which enables the originating company to select the partner on intercompany journal lines. Option C (Set up elimination rules) is correct because elimination rules are configured to automatically remove intercompany balances and transactions during consolidation, ensuring the consolidated financial statements do not double-count intercompany activity. Option E (Configure intercompany accounting sequences) is correct because intercompany accounting sequences define the numbering and posting behavior for the automatically generated due-to and due-from transactions between partners, which is mandatory for intercompany postings to work. Option A (Create a consolidation company) is not required for basic intercompany accounting setup; a consolidation company is only needed when performing consolidation, not for day-to-day intercompany transactions. Option D (Set up budget models) is unrelated to intercompany accounting, as budget models are used for budgeting and control, not for intercompany partner or elimination configuration.

Answer

Create a consolidation company

Answer

Set up budget models

Question 7

A company uses Dynamics 365 Finance. Which TWO types of financial dimensions can be created?

Accepted Answer

Entity-backed dimensions. Custom dimensions are user-defined. Entity-backed dimensions are based on system entities like Cost centers. Fixed dimensions are not a type; they are default dimension values. Main account is an account, not a dimension. Budget dimensions are a concept, not a type.

Answer

Main account

Answer

Fixed dimensions

Answer

Budget dimensions

Question 8

Refer to the exhibit. A journal entry in Dynamics 365 Finance shows a debit to account 1100-001-01 and offset to account 2100-002-02. The financial dimensions include Department=Sales and CostCenter=CC001. What is the purpose of this entry?

Accepted Answer

Increasing cash and increasing a liability. A debit to account 1100 (typically a cash or bank account) increases cash, and the offsetting credit to account 2100 (typically a liability such as accounts payable or accrued liabilities) increases a liability. This journal entry therefore records a transaction that increases both cash and a liability, such as taking out a loan or recording an accrued expense.

Answer

Recording a customer payment

Answer

Recording a vendor payment

Answer

Reclassifying a bank transaction

Question 9

Refer to the exhibit. A sales order in Dynamics 365 Finance has a line discount of 10% and a header discount of 5%. What is the net amount for the line item after both discounts?

Accepted Answer

$1,282.50. The net amount is calculated by applying the line discount first, then the header discount on the discounted line amount. Assuming the original line amount is $1,500 (as implied by the options), a 10% line discount reduces it to $1,350. Then a 5% header discount on $1,350 reduces it to $1,282.50. Thus, $1,282.50 is correct.

Answer

$1,500.00

Answer

$1,425.00

Answer

$1,350.00

Question 10

A company is setting up Dynamics 365 Finance for the first time. The system administrator needs to create a fiscal calendar that starts on July 1 and ends on June 30 of the following year. Which type of fiscal year should the administrator select?

Accepted Answer

July through June. In Dynamics 365 Finance, when creating a fiscal calendar, the administrator selects a fiscal year template that defines the start and end months. A fiscal year running from July 1 to June 30 corresponds to the 'July through June' template, which the system uses to generate periods and periods for that calendar.

Answer

October through September

Answer

Calendar year

Answer

April through March

Question 11

A company using Dynamics 365 Finance notices that the 'General ledger' trial balance does not match the subledger balances for accounts payable. The discrepancy appears only for a specific vendor. What is the most likely cause?

Accepted Answer

An invoice for the vendor is in 'Pending' status and has not been posted.. In Dynamics 365 Finance, subledger-to-general-ledger reconciliation compares posted subledger transactions (like vendor invoices) to the general ledger balances. An invoice in 'Pending' status has not been posted to the general ledger, so it appears in the subledger but not in the GL trial balance, causing a discrepancy for that vendor. This is the most likely cause of a vendor-specific mismatch.

Answer

A payment journal was deleted after posting.

Answer

The vendor account is on hold.

Answer

The vendor's currency is different from the company's accounting currency.

Question 12

A company uses Dynamics 365 Finance and wants to use Copilot to assist with financial analysis. Which task can Copilot perform in Dynamics 365 Finance?

Accepted Answer

Generate a cash flow forecast report.. Copilot in Dynamics 365 Finance can generate a cash flow forecast report by analyzing financial data and providing insights. It assists with financial analysis by summarizing data, identifying trends, and generating reports, but it does not perform administrative tasks like configuring parameters or running batch jobs.

Answer

Configure system parameters for the General ledger.

Answer

Run batch jobs for period-end closing.

Answer

Automatically post all pending invoices.

Question 13

A company uses Dynamics 365 Finance and has enabled the 'Budget control' feature. Users report that they cannot post purchase requisitions even though sufficient budget is available. What is the most likely cause?

Accepted Answer

Budget register entries have not been created for the current fiscal year.. Budget control requires budget register entries to be created and posted for the current fiscal year to establish the budget amounts. Without these entries, the system has no budget to compare against, so even if sufficient budget appears available, the control cannot validate and will block the requisition. Option A is incorrect because permissions do not affect budget control checks. Option B is incorrect because the feature is enabled (as stated), so it is not disabled for the legal entity. Option D is incorrect because budget control can be configured for purchase requisitions, but the issue is the missing budget register entries.

Answer

Users do not have permission to post purchase requisitions.

Answer

Budget control is disabled for the legal entity.

Answer

Budget control is configured to check only purchase orders.

Question 14

Which THREE of the following are requirements for setting up 'Intercompany accounting' in Dynamics 365 Finance?

Accepted Answer

Trading partner relationships must be defined between legal entities.. Option A is correct because intercompany accounting in Dynamics 365 Finance requires you to define trading partner relationships between the legal entities that will transact with each other; this relationship enables the system to create the corresponding due-to/due-from entries automatically. Option C is correct because intercompany journals (such as the Intercompany journal and the Intercompany general journal) must be configured so that transactions posted in one legal entity generate the balancing entries in the counterpart legal entity. Option D is correct because elimination rules must be configured for consolidation so that intercompany balances and transactions are eliminated when the consolidated financial statements are produced. Option B is not required because legal entities in intercompany accounting may use different charts of accounts, provided the accounts are mapped appropriately for the intercompany postings. Option E is not required because legal entities can use different accounting currencies; the system handles currency conversion for intercompany transactions.

Answer

All legal entities must use a shared chart of accounts.

Answer

All legal entities must use the same currency.

Question 15

Refer to the exhibit. The JSON snippet shows a budget register entry configuration in Dynamics 365 Finance. Account '601500-001-023' has financial dimensions: Main account 601500, Department 001, and Project 023. Account '601500-001-024' has dimensions: Main account 601500, Department 001, Project 024. If budget control is enabled for Department 001, what is the total budget amount available for Department 001?

Accepted Answer

80,000 USD. Budget control is enabled for Department 001, so the total budget available for that department is the sum of all budget register entries that include Department 001. The two accounts shown both have Department 001, with amounts 50,000 USD and 30,000 USD, totaling 80,000 USD. Therefore, the total budget amount available for Department 001 is 80,000 USD.

Answer

50,000 USD

Answer

30,000 USD

Answer

80,000 USD