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

Question 1

A company uses Dynamics 365 Finance with the Budgeting module. The budget manager needs to prevent purchase orders from being processed if they would cause the department budget to exceed the available balance, but also wants to allow a specific group of users to override the check with a password. Which budget control configuration should be used?

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

Accepted Answer

Enable budget control and assign the over budget permission 'Deny' to most users, and 'Allow' with password to the specific group.. Budget control in Dynamics 365 Finance allows granular permissions for over-budget conditions. By setting the default to 'Deny', the system blocks purchase orders that exceed the budget. Assigning 'Allow' with password requirement to a specific user group enables those users to override the block after entering a password. This balances strict control with authorized flexibility.

Answer

Enable budget control and set the over budget permission to 'Allow' for all users.

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Enable budget control and configure the over budget permission to 'Warn' for all users.

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Enable budget control and set the over budget permission to 'Deny' for all users, then create a workflow for exceptions.

Question 2

A company uses Dynamics 365 Finance and needs to streamline its accounts payable process. The AP manager wants to know which TWO features can help automate the creation of vendor payments based on due dates. (Choose two.)

Accepted Answer

Vendor payment proposal. The vendor payment proposal and payment schedule are both features that help automate the creation of vendor payments based on due dates. The payment proposal uses criteria like due dates to suggest payments, while payment schedules define when payments are due. Together, they streamline the AP process by reducing manual payment entry.

Answer

Vendor invoice workflow

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Budget control

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Payment terms

Question 3

A company uses Dynamics 365 Finance. The accounts payable manager needs to ensure that vendor invoices are matched to product receipts before they can be approved for payment. The company wants to enforce a three-way match policy for all purchase orders. Which configuration should the manager set up?

Accepted Answer

Enable invoice matching on the vendor account and set the matching policy to three-way match.. Invoice matching in Dynamics 365 Finance is the feature that enforces matching policies. By enabling invoice matching on the vendor account and setting the matching policy to three-way match, the system will automatically compare the invoice to the product receipt and purchase order. This ensures that invoices are only approved if they match the quantities and prices, meeting the manager's requirement.

Answer

Set up a posting profile that requires a product receipt before posting the invoice.

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Create a purchase agreement that specifies the prices and quantities for the vendor.

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Configure a workflow for vendor invoices that includes a manual review task for the purchasing manager.

Question 4

A company uses Dynamics 365 Finance. A new controller wants to understand how the system handles multiple currencies in the general ledger. The company has transactions in EUR, USD, and GBP. Which setup allows the system to automatically calculate gains or losses due to exchange rate fluctuations?

Accepted Answer

Set up exchange rate types and assign them to the ledger.. The correct setup is to configure exchange rate types and assign them to the ledger. Exchange rate types provide the rates needed to convert foreign currency transactions. Assigning them to the ledger allows the system to use these rates for revaluation, which calculates unrealized gains or losses. This is the foundational setup for automatic exchange gain/loss calculation.

Answer

Enable 'Foreign currency revaluation' in the General ledger parameters.

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Configure the accounting currency as the reporting currency.

Answer

Create a separate legal entity for each currency.

Question 5

A company is implementing Dynamics 365 Finance and needs to configure a chart of accounts that supports multiple legal entities with different fiscal requirements. Which structure should be used?

Accepted Answer

Use a shared chart of accounts with separate fiscal calendars per legal entity.. A shared chart of accounts is the recommended approach in Dynamics 365 Finance when multiple legal entities must operate under different fiscal requirements. By sharing the chart of accounts but assigning separate fiscal calendars per legal entity, the organization maintains a consistent account structure across entities while allowing each entity to comply with its own fiscal year, period definitions, and closing schedules. This balances standardization with regulatory flexibility.

Answer

Use a single shared chart of accounts with one shared fiscal calendar.

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Use main accounts only without dimensions.

Answer

Create a separate chart of accounts for each legal entity.

Question 6

A company uses Dynamics 365 Finance and needs to create a vendor payment that includes a discount of $50 if paid within 10 days. The invoice is for $1,000. The payment is made on day 8. What should the payment amount be?

Accepted Answer

$950. The vendor payment is made within the 10-day discount period, so the $50 discount applies to the $1,000 invoice. The payment amount is $1,000 - $50 = $950. In Dynamics 365 Finance, this is handled through the cash discount setup on the vendor payment terms, which automatically calculates the discounted amount when the payment date falls within the discount window.

Answer

$1,000

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$900

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$1,050

Question 7

A company is implementing Dynamics 365 Finance and needs to automate the reconciliation of bank transactions. Which feature should be used to match bank statement lines with open bank document lines based on rules?

Accepted Answer

Advanced bank reconciliation. Advanced bank reconciliation in Dynamics 365 Finance allows you to import bank statement lines and automatically match them to open bank document lines (such as checks, deposits, and transfers) using user-defined matching rules. This feature supports rule-based matching (e.g., by amount, date, or reference) and handles complex scenarios like partial matches or tolerance thresholds, making it the correct choice for automating bank transaction reconciliation.

Answer

Bank account reconciliation

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Payment proposal

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Automatic settlement

Question 8

You are the Dynamics 365 Finance administrator for a manufacturing company with multiple legal entities. The company uses intercompany transactions between Entity A (US) and Entity B (Germany). Entity A sells raw materials to Entity B. The transactions must be recorded in both entities' ledgers, and the intracompany trade must be eliminated during consolidation. Recently, the accounting team reported that intercompany transactions are not being eliminated correctly. Upon investigation, you find that the intercompany transactions were posted using separate purchase orders and sales orders, not through the intercompany module. The elimination process uses intercompany eliminations rules. What should you do to ensure proper elimination?

Accepted Answer

Recreate the transactions using the intercompany module and delete the original orders.. The intercompany module in Dynamics 365 Finance is specifically designed to automatically generate matching transactions in both legal entities and to flag those transactions for elimination during consolidation. By recreating the transactions through the intercompany module, you ensure that the intercompany eliminations rules can correctly identify and eliminate the intercompany trade. Deleting the original orders removes the manually created purchase and sales orders that were not linked to the elimination process.

Answer

Reverse the existing transactions and repost them with the same method.

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Create manual elimination journal entries to correct the balances.

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Adjust the elimination rules to match the existing transactions.

Question 9

A manufacturing company is implementing Dynamics 365 Finance and wants to streamline its procure-to-pay process. They need to automatically generate purchase orders when inventory falls below a predefined level. Which feature should they configure?

Accepted Answer

Set up reorder point planning and coverage groups. In Dynamics 365 Finance, reorder point planning combined with coverage groups is the standard mechanism to automatically generate purchase orders when inventory falls below a predefined threshold. Coverage groups define the replenishment strategy (e.g., min/max, coverage period), and when the on-hand quantity drops below the reorder point, the master planning engine creates planned purchase orders. This directly addresses the requirement to automate PO generation based on inventory levels.

Answer

Use procurement catalogs with punch-out to vendor

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Configure purchase requisition workflow with auto-release

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Enable vendor collaboration for automatic ordering

Question 10

A company's finance team reports that in the general ledger, the balance for the 'Office Supplies' account shows a credit balance of $500, but they expected a debit balance. What is the most likely cause of this discrepancy?

Accepted Answer

A voucher was posted with the wrong debit/credit sign. In Dynamics 365 Finance, the general ledger account for 'Office Supplies' is an expense account, which normally carries a debit balance. A credit balance indicates that a voucher was posted with the wrong debit/credit sign, such as entering a negative amount or selecting the wrong account type during transaction entry. This is the most common cause of a balance sign reversal in an expense account.

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The period close process was run without finalizing

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A reversing entry was posted incorrectly

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A financial dimension was incorrectly assigned

Question 11

A company uses Dynamics 365 Finance and needs to ensure that all vendor invoices are approved by the department manager before payment. Which feature should they use?

Accepted Answer

Configure vendor invoice workflows. Vendor invoice workflows in Dynamics 365 Finance allow you to define a business process that routes invoices for approval based on specific conditions, such as department manager approval. This feature ensures that invoices are reviewed and approved before payment is processed, meeting the requirement for managerial approval.

Answer

Set up payment schedules

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Enable invoice matching validation

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Create purchase order approval workflows

Question 12

A company using Dynamics 365 Finance notices that the trial balance does not balance because the 'Accounts Payable' account has a negative balance. What could be the reason?

Accepted Answer

A vendor payment was posted to the wrong vendor account. A negative balance in the Accounts Payable account typically indicates that credits (payments) exceed debits (invoices) for a vendor. Posting a vendor payment to the wrong vendor account creates a credit balance in the intended vendor's subledger without a corresponding invoice, causing the trial balance to be out of balance because the general ledger account reflects the payment but the subledger detail is misaligned.

Answer

A prepayment invoice was posted without a purchase order

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Intercompany transactions were posted incorrectly

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A bank reconciliation was not performed

Question 13

Drag and drop the steps to create a new customer record in Dynamics 365 Sales in the correct order.

Accepted Answer

Step 1: Open Dynamics 365 Sales app, Step 2: Navigate to customer list, Step 3: Click New to create a new customer record, Step 4: Fill in required fields, Step 5: Save the record.. Creating a customer record starts with opening the app, then navigating to the customer list, creating a new record, filling in details, and saving.

Answer

Step 1: Open Dynamics 365 Sales app, Step 2: Navigate to customer list, Step 3: Click New to create a new customer record, Step 4: Save the record, Step 5: Fill in required fields.

Answer

Step 1: Open Dynamics 365 Sales app, Step 2: Click New to create a new customer record, Step 3: Navigate to customer list, Step 4: Fill in required fields, Step 5: Save the record.

Answer

Step 1: Navigate to customer list, Step 2: Open Dynamics 365 Sales app, Step 3: Click New to create a new customer record, Step 4: Fill in required fields, Step 5: Save the record.

Question 14

Drag and drop the steps to set up a new user in Dynamics 365 Finance and Operations in the correct order.

Accepted Answer

Create user record, then enter user details, then assign security roles, then enable user.. User setup includes creating the user, entering details, assigning roles, and enabling.

Answer

Create user record, then assign security roles, then enter user details, then enable user.

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Create user record, then enter user details, then enable user, then assign security roles.

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Enter user details, then create user record, then assign security roles, then enable user.

Question 15

Match each Dynamics 365 Finance module to its primary function.

Accepted Answer

General ledger: Records all financial transactions and provides a complete audit trail. The correct matches are: General ledger (records transactions), Accounts payable (vendor invoices), Accounts receivable (customer invoices), and Fixed assets (asset lifecycle). Distractors swap definitions between General ledger and Accounts payable.

Answer

General ledger: Manages customer invoices and payments

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Accounts payable: Records all financial transactions and audit trail