MB-920 Describe Dynamics 365 Finance Practice Test 9 — 15 Questions

Question 1

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?

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

Accepted Answer

Increasing cash and increasing a liability. The entry debits Cash (account 1100, an asset) and credits Accounts Payable (account 2100, a liability). A debit increases Cash, and a credit increases Accounts Payable. This results in both an increase in cash and an increase in a liability, which matches option C. Such an entry could represent receiving a deposit or a loan, where the company receives cash and incurs a liability to repay.

Answer

Recording a customer payment

Answer

Recording a vendor payment

Answer

Reclassifying a bank transaction

Question 2

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. First apply line discount: 10 * 150 = 1500, minus 10% = 1350. Then apply header discount: 1350 minus 5% = 1282.50.

Answer

$1,500.00

Answer

$1,425.00

Answer

$1,350.00

Question 3

A company is implementing Dynamics 365 Finance and needs to configure a chart of accounts that supports multiple legal entities with different fiscal year requirements. What should the administrator do to ensure each legal entity can have its own fiscal calendar while sharing the main accounts?

Accepted Answer

Configure shared main accounts and assign a separate fiscal calendar to each legal entity.. Dynamics 365 Finance enables sharing main accounts across multiple legal entities while each legal entity can have its own fiscal calendar. This is accomplished by using a shared chart of accounts with shared main accounts, and then in the Ledger setup for each legal entity, assigning a separate fiscal calendar. Option A is incorrect because fiscal calendars are defined per legal entity, not per main account. Option C is incorrect because a single fiscal calendar cannot accommodate different fiscal year requirements across entities. Option D is incorrect because separate charts of accounts are unnecessary; main accounts can be shared while fiscal calendars differ.

Answer

Assign a fiscal calendar to each main account.

Answer

Create a single fiscal calendar and share it across all legal entities.

Answer

Create a separate chart of accounts for each legal entity.

Question 4

A manufacturing company uses Dynamics 365 Finance. The finance team notices that the 'Work in process' (WIP) account balances are not clearing correctly after production orders are completed. The production orders use the 'Standard cost' costing method. What is the most likely cause of this issue?

Accepted Answer

The production order variances have not been calculated and posted.. In standard costing, any variances between actual costs and standard costs must be calculated and posted to clear the Work in Process (WIP) account. If variances are not posted, the WIP balance remains uncleared. Option B is incorrect because an unapproved BOM version prevents production from being released or costed, but does not directly cause WIP clearing issues. Option C is incorrect because the cost category type (indirect vs. direct) affects how costs are applied but not the clearing of WIP. Option D is incorrect because item coverage group settings pertain to planning and replenishment, not to accounting transactions like WIP clearing.

Answer

The bill of materials (BOM) version is not approved.

Answer

The cost category for the production route is set to 'Indirect cost' instead of 'Direct'.

Answer

The item coverage group is set to 'Period' instead of 'Requirement'.

Question 5

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. A fiscal year starting July 1 and ending June 30 is defined as a 'July through June' fiscal year in Dynamics 365 Finance. Option B (October through September) is a different fiscal year pattern. Option C (Calendar year) runs January to December. Option D (April through March) is another fiscal year variant.

Answer

October through September

Answer

Calendar year

Answer

April through March

Question 6

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.. An invoice in 'Pending' status is recorded in the subledger (Accounts Payable) but has not yet been posted to the General Ledger. This creates a discrepancy where the subledger shows the vendor balance including the pending invoice, while the General Ledger trial balance does not include it. Option A is wrong because a posted payment journal cannot be deleted; reversing entries are used instead. Option B is wrong because placing a vendor on hold prevents new transactions but does not affect existing recorded balances. Option D is wrong because currency differences are handled through revaluation and affect all transactions for that vendor, not just a single discrepancy.

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 7

A company is configuring Dynamics 365 Finance for a new subsidiary. The subsidiary uses a different currency than the parent company. What must be set up to enable translation of the subsidiary's financial statements to the parent's reporting currency?

Accepted Answer

Exchange rates. Exchange rates are required for currency translation. Option A is wrong because currency revaluation is for adjusting balances, not for translation. Option C is wrong because a consolidation company is used to combine results, but translation requires exchange rates. Option D is wrong because intercompany accounting is for transactions between entities, not for translation.

Answer

Currency revaluation

Answer

Consolidation company

Answer

Intercompany accounting

Question 8

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, assisting financial analysis. Option A is wrong because Copilot cannot configure system parameters for the General ledger; it is an AI assistant that provides insights but does not perform system configuration. Option B is wrong because Copilot cannot run batch jobs for period-end closing; these are automated background processes. Option D is wrong because Copilot cannot automatically post pending invoices; transaction posting requires manual or workflow-driven actions, not Copilot's direct execution.

Answer

Configure system parameters for the General ledger.

Answer

Run batch jobs for period-end closing.

Answer

Automatically post all pending invoices.

Question 9

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 10

A company is implementing Dynamics 365 Finance and needs to track expenses by department and project. What dimension combination should be used?

Accepted Answer

Department and Project. Department and Project are both financial dimensions in Dynamics 365 Finance, enabling expense tracking by department and project. Option B is wrong because Vendor is a party type, not a financial dimension. Option C is wrong because Item is a product dimension, not suitable for tracking expenses by department and project. Option D is wrong because Location is a dimension but is not typically used for expense tracking in this context; Cost center alone would be more appropriate.

Answer

Department and Vendor

Answer

Item and Project

Answer

Location and Cost center

Question 11

Which TWO of the following are valid actions when using the 'Vendor collaboration' workspace in Dynamics 365 Finance?

Accepted Answer

Vendors can respond to purchase order confirmations.. Vendor collaboration in Dynamics 365 Finance allows vendors to respond to purchase order confirmations (option C) and view their invoices (option D). Options A, B, and E are incorrect: vendors cannot approve purchase requisitions, update item prices, or create purchase orders.

Answer

Vendors can approve purchase requisitions.

Answer

Vendors can update item prices.

Answer

Vendors can create purchase orders.

Question 12

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.. Options A, C, and D are correct. Intercompany accounting requires trading partner relationships, intercompany journals, and elimination rules. Option B is wrong because a shared chart of accounts is not required; each legal entity can have its own. Option E is wrong because a single currency is not required; different currencies are allowed.

Answer

All legal entities must use a shared chart of accounts.

Answer

All legal entities must use the same currency.

Question 13

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

Accepted Answer

Define financial dimensions.. Options B and D are correct. The General ledger in Dynamics 365 Finance stores the chart of accounts (D) and allows you to define financial dimensions (B) for categorizing transactions. Option A (manage purchase orders) belongs to Procurement and sourcing, Option C (manage fixed assets) is handled in the Fixed assets module, and Option E (create sales invoices) is done in Accounts receivable.

Answer

Manage purchase orders.

Answer

Manage fixed assets.

Answer

Create sales invoices.

Question 14

Refer to the exhibit. The SQL-like query is used to retrieve data from Dynamics 365 Finance. What does this query return?

Accepted Answer

Main accounts with total debits greater than 10,000, ordered by total descending.. The query selects MainAccount and sum of Amount from GeneralJournalEntry for a specific date range, groups by MainAccount, filters groups with total amount > 10000, and orders by total descending. Option A is wrong because it does not filter by a specific account. Option C is wrong because it returns only accounts with total > 10000. Option D is wrong because it is not ordered ascending.

Answer

All general journal entries for a specific main account.

Answer

Main accounts with total amounts less than 10,000, ordered ascending.

Answer

All main accounts with any activity in 2025.

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. The budget register entries for accounts 601500-001-023 (50,000 USD) and 601500-001-024 (30,000 USD) both have Department 001. With budget control enabled for that department, the total budget available is 50,000 + 30,000 = 80,000 USD. Therefore, option C (80,000 USD) is the correct answer. Option D is a duplicate and not considered a separate correct answer.

Answer

50,000 USD

Answer

30,000 USD

Answer

80,000 USD