Microsoft · Free Practice Questions · Last reviewed May 2026
30real exam-style questions organised by domain, each with the correct answer highlighted and a plain-English explanation of why it's right — and why the others are wrong.
A Dynamics 365 Finance consultant is configuring the Accounts receivable module for a company that sells to other businesses. The company wants to automatically place a customer on credit hold when their overdue balance exceeds a specific threshold. The consultant needs to set up the credit management functionality. Which configuration should the consultant perform first?
Create a collection letter sequence and assign it to the customer's posting profile.
Configure credit card processing for the customer and set up payment terms to require prepayment.
Set up aging period definitions in Accounts receivable parameters and assign them to customer posting profiles.
Enable the Credit management feature in Feature management and configure credit management parameters.
Enabling the Credit management feature in Feature management activates the Credit management workspace, credit limit and credit hold rules, and related parameters. Configuring credit management parameters defines the company's credit policy, including how credit limits are calculated and how holds are applied. This is the foundational step before setting up credit limits, rules, and customer credit groups.
A company uses subscription billing and needs to group multiple subscription charges into a single invoice for each customer. They want to ensure that all charges for a customer are billed together on the same invoice, regardless of the subscription start dates. Which subscription billing parameter should they configure?
Proration method
Charge setup
Invoice grouping
Invoice grouping allows multiple subscription charges for the same customer to be consolidated into a single invoice. By configuring invoice grouping on the billing schedule or subscription, the system combines charges that would otherwise be billed separately. This directly meets the requirement to bill all charges together on one invoice per customer.
Billing cycle
A company uses Dynamics 365 Finance to bill customers for recurring maintenance services. The billing schedule must generate invoices monthly, but the amount must be prorated for the first and last periods based on the number of days. The consultant sets up a billing schedule with a monthly frequency. Which configuration should the consultant use to ensure proration occurs correctly?
Set the Prorate option to Yes on the billing schedule line and define the start date and end date on the billing schedule.
The Prorate option on the billing schedule line enables proration for the first and last periods based on the start and end dates of the billing schedule. The system calculates the daily rate and charges only for the active days in those periods. This is the correct configuration to meet the requirement of prorating the first and last invoices.
Use a billing schedule with a monthly frequency and set the Prorate option to No, then create separate billing schedule lines for the first and last periods with adjusted amounts.
Set the Billing frequency to Daily and manually adjust the invoice amounts for the first and last periods.
Configure a billing schedule with a monthly frequency and set the Invoice now option to Yes for all periods.
A company uses Dynamics 365 Finance. Customers are grouped into customer pools, and the collections team wants to generate a list of customers with overdue balances that can be worked through in a single page. The collections supervisor needs to create a collection letter sequence that applies a different letter text for each aging period and posts a fee to the customer account. Which configuration should you use?
Create a collection letter sequence with one code and assign all aging period definitions to that single code, then enable the Print fee check box on the sequence header.
Create one collection letter code per aging period, assign each code to the customer posting profile, and use the Accounts receivable parameters to post the fee.
Set up a collection letter sequence with collection letter codes, assign aging period definitions to each code, and select the Print fee check box on each code.
A collection letter sequence is built from collection letter codes, each linked to an aging period definition. The Print fee option on the code causes a fee to be posted to the customer account when the letter is posted. This delivers different letter text per aging bucket and posts a fee, exactly as required.
Create a collection letter sequence with multiple codes, assign aging period definitions, and set the fee amount on the Collections page before each letter run.
A credit manager needs to review a customer's credit history, including credit limits, current balance, and any credit holds, directly from the customer record. They also want to see a graphical representation of the customer's credit utilization. Which workspace should they use?
Cash management workspace
Accounts receivable workspace
Credit and collections workspace
The Credit and collections workspace provides a centralized view of customer credit information, including credit limits, balances, and holds. It also includes graphical tiles and charts showing credit utilization and aging. This workspace is designed for credit managers to monitor and act on credit-related data, making it the correct choice for the scenario.
Customer service workspace
A subscription billing company sells a monthly service. A customer is billed on the first day of each month and pays on the fifteenth. The company wants to recognize revenue evenly across the month and automatically create the billing schedule for the next twelve months when a sales order is confirmed. Which feature should the functional consultant configure?
A project contract with a fixed-price billing rule and a milestone that recognizes revenue on a straight-line basis over twelve months.
A recurring free text invoice template with a monthly interval and a posting profile that defers revenue to a balance sheet account.
Revenue recognition with a billing schedule, using a billing schedule group with a monthly recurrence and a revenue recognition schedule that spreads revenue across the period.
Subscription billing in Dynamics 365 Finance uses billing schedules to generate future billing lines and revenue recognition schedules to defer and recognize revenue. A billing schedule group with a monthly recurrence creates the twelve future billing lines, and the revenue recognition schedule spreads revenue across each period. This meets both the automatic schedule creation and even revenue recognition requirements.
A sales agreement with a monthly commitment and a rebate program that generates invoices and defers revenue automatically.
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Practice this domainYour company uses a Shared Chart of Accounts. You need to restrict the use of a specific main account to only one legal entity. How should you proceed?
Delete the main account from the shared chart.
Use the Legal entity overrides tab on the Main account.
The Legal entity overrides tab allows you to configure specific settings for individual legal entities. By adding the relevant legal entity and setting the account status, you can restrict access, define specific posting rules, or override default values without affecting the global definition or access for other legal entities in the system.
Modify the Account structure for that entity.
Create a new chart of accounts for the entity.
Which component in Dynamics 365 Finance is used to categorize financial transactions for reporting purposes while maintaining the integrity of the Chart of Accounts?
Account structures.
Financial dimensions.
Financial dimensions are the primary mechanism for tagging transactions with metadata. They allow for multidimensional analysis, such as Profit and Loss by department, without requiring a massive, unmanageable chart of accounts. This design is foundational to the reporting capabilities within Dynamics 365 Finance and is essential for effective financial management.
Ledger sets.
Currency conversion policies.
Your organization wants to automate the calculation of unrealized gains and losses at the end of each month. What is the recommended approach?
Manually adjust the ledger using an offset account.
Use the Foreign currency revaluation batch job.
The Foreign currency revaluation batch job is the standard, built-in feature for automated adjustments. It allows for configurable parameters regarding which accounts to revalue and the logic to apply. Scheduling it ensures that the revaluation happens consistently every period, which is crucial for compliance with international accounting standards for currency exposure.
Create an integration with an external exchange bank.
Export data to Excel, calculate, and re-import.
When defining a Fiscal Calendar, what is the purpose of the 'Period' type?
To define the duration of a transaction.
To identify Opening or Closing periods.
Period types are essential for managing the fiscal year-end. 'Opening' periods are used for beginning balances, while 'Closing' periods are used to isolate year-end adjustments that occur after the last standard month. This separation ensures that financial statements for the current year are not contaminated by adjustments meant for the next.
To set the base currency for the period.
To control access for specific users.
Which THREE items are included in the configuration of an 'Advanced rule' for account structures? (Choose THREE)
Main account range.
The main account range defines the trigger point for the advanced rule. When a transaction is posted using an account within this specified range, the advanced rule is applied, ensuring that the additional dimension requirements are evaluated by the system, thus enforcing consistent data entry based on the chosen account.
Financial dimension selection.
You must select which financial dimensions are involved in the advanced rule. These selected dimensions will then be subject to the validation logic defined in the rule. This allows for conditional requirements, such as forcing a Project dimension only when a Capital Expenditure account is selected during journal entry.
Rule criteria and criteria values.
The criteria define the conditions under which the advanced rule applies. By setting specific values, you ensure that the extra requirements are only triggered when necessary. This level of detail allows for highly customized ledger validation without needing to create complex, unmanageable account structures for every possible business scenario.
Legal entity association.
Ledger currency profile.
When configuring the General Ledger, why is it necessary to map every main account to an 'Account category'?
To enable transactional tax calculation.
To support financial reporting and statement design.
Account categories provide the structure required for default financial report definitions. Without this mapping, the system cannot automatically group accounts into assets, liabilities, or expenses. By utilizing categories, the Financial Reporting engine can dynamically generate statements, ensuring that new accounts are correctly reflected in reports without requiring manual report updates.
To enforce mandatory dimension entry.
To override the ledger posting profile.
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Practice this domainA company requires that vendor invoices for services be approved by the department manager before they can be posted. Which configuration must be enabled in Accounts payable parameters?
Enable the 'Post invoice automatically' parameter.
Configure the 'Allow invoice matching' parameter.
Activate 'Vendor invoice workflow' in the Accounts payable parameters.
Activating the vendor invoice workflow is the mandatory prerequisite for utilizing the workflow engine. Once enabled, you can define specific approval steps and conditions, allowing the system to route invoices to the correct department manager based on the organizational hierarchy defined in the application.
Set the 'Financial dimensions' validation to Mandatory.
Refer to the exhibit. A user submits an expense report for $75.00 under the 'Meals' category. Based on the provided policy JSON, what is the outcome during the expense submission process?
The expense is submitted with a warning, but requires supervisor approval.
The expense is automatically reduced to $50.00 and submitted.
The system prevents the user from submitting the expense report.
The HardStop action type is designed to block the submission process when the expense amount exceeds the defined policy limit. By preventing the submission, the system ensures that non-compliant expenses do not enter the workflow, effectively enforcing the organization's travel policy at the point of entry.
The expense is submitted, but flagged for post-payment audit.
Which TWO of the following are prerequisites for setting up a vendor payment run using the payment proposal feature? (Choose two)
Vendors must be marked as 'On hold' for payment.
Invoices must have a due date that falls within the proposal criteria.
The payment proposal feature relies on due date filtering to identify which invoices require settlement. By specifying a date range, the user tells the system which invoices are eligible for payment, ensuring that only current liabilities are included in the generated payment journal during the batch process.
A valid Method of payment must be assigned to the vendor or invoice.
The Method of payment is critical because it dictates how the payment is made, including the specific bank account and payment format file (such as ACH or wire transfer). Without this configuration, the system cannot determine the appropriate account to draw funds from when proposing payments.
The Vendor invoice must be posted with a 'Disputed' status.
The vendor must have a credit limit of zero.
What is the purpose of the 'Vendor collaboration' module in Dynamics 365 Finance?
To allow vendors to update their own financial ledger accounts.
To facilitate communication and document exchange between the vendor and the buyer.
Vendor collaboration provides a secure portal where vendors can confirm purchase orders, update lead times, and submit electronic invoices. This facilitates better communication, reduces phone calls and emails, and ensures that the data in Dynamics 365 is synchronized with the vendor's actual capabilities and invoice submissions.
To enable vendors to process and approve their own payments.
To manage the vendor's internal inventory levels automatically.
When setting up a vendor, what is the primary function of a 'Vendor group'?
To define the vendor's credit limit.
To determine the default posting profile for the vendor.
Vendor groups are linked to vendor posting profiles, which control the General Ledger accounts used for vendor transactions. By assigning a group, the system automatically uses the correct ledger accounts, ensuring that all payables are recorded in the appropriate GL accounts without manual user interference.
To specify the vendor's primary contact person.
To automatically apply discounts to all items.
A company needs to pay multiple invoices for a single vendor in one payment. Which feature should they use to combine these invoices into a single payment?
Vendor payment journal manual entry.
Payment proposal.
The payment proposal feature automates the selection of multiple invoices that are due for payment. By using this tool, the system automatically groups all eligible invoices for a vendor into a single journal batch, facilitating a streamlined and accurate payment process while reducing manual data entry efforts.
Purchase order settlement.
Vendor invoice journal.
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Practice this domainYour organization requires that a fixed asset be depreciated over a specific number of years, but the depreciation amount must be higher in the earlier years of the asset's life. Which depreciation profile should you configure?
Straight line service life
Reducing balance
This method applies a constant percentage to the declining book value of the asset. By calculating depreciation on the remaining balance rather than the original cost, the expense is naturally higher in the initial periods and decreases as the asset ages, fulfilling the requirement for accelerated depreciation.
Consumption
Manual
A company is acquiring a fleet of vehicles and needs to track them as fixed assets. Which TWO setups must be completed in Dynamics 365 Finance to ensure these assets are fully operational and depreciable?
Configure Fixed Asset Groups
Fixed asset groups are essential for grouping assets with similar characteristics. They control mandatory parameters, such as the depreciation profile, depreciation convention, and ledger accounts, which are necessary for automating the financial processing of assets within the subledger and the general ledger.
Assign a Depreciation Book
A depreciation book or value model is required to track the financial lifecycle of the asset. It defines the rules for how an asset is depreciated, the periods it covers, and whether the depreciation entries should post to the general ledger, making it mandatory for operational tracking.
Enable Asset Leasing
Create a Vendor Group
Define a Project Category
A company decides to upgrade an existing production machine, which increases the asset's useful life by three years. How should this be handled in Dynamics 365 Finance to maintain accurate financial records?
Create a new fixed asset record for the upgrade.
Perform an acquisition adjustment and update the service life.
Acquisition adjustments correctly reflect the added value of the upgrade, and updating the service life in the asset book triggers the system to spread the remaining and new book value over the extended useful life. This is the standard procedure for capital improvements in Dynamics 365 Finance.
Expense the upgrade cost immediately in the General Ledger.
Dispose of the old machine and acquire a new one.
What is the primary function of a 'Depreciation Book' in Dynamics 365 Finance compared to a 'Value Model'?
Value models update the general ledger, while depreciation books do not.
Value models ensure that depreciation expenses are reflected in the company's financial statements through integration with the general ledger. Depreciation books function independently of the general ledger, allowing for parallel depreciation tracking often required for tax reporting without affecting the core financial books of the organization.
Depreciation books are mandatory for all assets.
Value models are used only for intangible assets.
Depreciation books automate asset disposal.
Refer to the exhibit. Why is the system preventing further depreciation for asset A001?
The asset is marked as inactive.
The depreciation profile is incorrectly configured.
The net book value has reached the salvage value threshold.
Fixed asset depreciation logic is designed to stop once the asset's net book value equals or falls below the salvage value. This prevents the asset from being undervalued and ensures the financial records reflect the asset's estimated worth at the end of its intended utility.
The depreciation proposal date is invalid.
Your company uses 'Bonus depreciation' for tax purposes. Which setup allows for an additional depreciation amount in the first year of an asset's life?
Depreciation profile.
Fixed asset group.
Bonus depreciation settings.
Bonus depreciation settings are the designated feature for applying additional, one-time depreciation amounts in the first year. This feature is integrated into the asset book, allowing for the precise application of tax-advantageous depreciation rules beyond the standard methods used for financial reporting.
Depreciation convention.
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Practice this domainAn organization uses Microsoft Dynamics 365 Finance to manage budget control. During purchase order entry, users receive an error stating that the budget limit has been exceeded, but the finance manager needs certain critical purchase orders to bypass this check temporarily without modifying the global budget control configuration. What should you configure to support this requirement?
Modify the budget cycle time span configuration to automatically increase the available spending limit for all active purchase requisitions.
Assign the budget control override security privilege to the purchasing manager role and configure budget group permissions.
Assigning the specific budget control override privilege directly grants authorized personnel the capability to bypass blocking validations during document entry. This operational flexibility ensures essential business purchases can proceed immediately while maintaining strict segregation of duties through role-based access control.
Create a new budget model and link it exclusively to the procurement category hierarchy to distribute the remaining funds.
Disable the check budget on document creation parameter within the general ledger parameters form globally.
An enterprise client using Microsoft Dynamics 365 Finance wants to configure budget planning stages and workflows. Which TWO actions must you complete to ensure budget planners can successfully submit worksheets for review? Each correct answer represents part of the solution.
Associate a workflow configuration to each budget planning stage where review is required.
Budget planning workflows dictate the routing and approval path of worksheets. Associating a workflow to the specific planning stage enables the submit option and triggers the automated approval hierarchy once users initiate the review process.
Assign user security roles directly to the budget planning process header configuration.
Configure budget planning stage security to grant user groups appropriate access to modify data.
Budget planning stage security governs which user groups may edit worksheets at each stage. Without granting the planners modify access on the relevant stage, they cannot save or submit their worksheets, so this action is required for successful submission into the review workflow.
Generate a recurring batch job to automatically validate all budget planning scenarios daily.
Set the budget cycle time span status to archived for all prior fiscal years.
An organization plans to implement budget control in Microsoft Dynamics 365 Finance. You must define the rules for checking budget funds prior to posting documents. Which component must you configure to establish these validation parameters?
Budget planning process workflow
Budget control configuration
Budget control configuration defines the source documents, budget dimensions, and validation rules that determine whether funds are checked before posting. It is the component where checking parameters are established, satisfying the stem's requirement to define pre-posting validation rules.
Budget register entry transaction definition
Financial dimension configuration for integrating applications
Your company requires specific documents to be evaluated against budget funds before they affect the general ledger. Which TWO source documents can be configured for budget control validation in Microsoft Dynamics 365 Finance? Select two.
Purchase requisitions
Purchase requisitions support budget control validation, checking available funds before commitment. Enabling budget control on this source document prevents requisitions exceeding budget from proceeding, satisfying the stem's requirement that documents be evaluated against funds before affecting the general ledger.
Customer free text invoices
Purchase orders
Purchase orders are committed expenditure, so they can be enabled for budget control, checking available funds at confirmation and encumbrance. This satisfies the stem's requirement that documents be evaluated against budget funds before affecting the general ledger, since encumbrances post to budget balances rather than actuals.
Fixed asset depreciation proposals
Bank deposit slips
Refer to the exhibit. You are configuring budget control for a new department. After enabling the budget control rule, you receive the error message shown in the exhibit when attempting to process a transaction. What is the root cause of this error?
The budget control dimension set is missing a financial dimension used in the transaction.
Budget control validation requires that all financial dimensions used in a transaction's ledger distribution are included in the defined budget control dimension set. If a dimension is missing from the configuration, the system cannot match the transaction to a budget register, resulting in a validation failure during processing.
The budget register entry has an expired fiscal period.
The user lacks security permissions to post the budget register entry.
The budget model status is set to 'Draft' instead of 'Active'.
Your company is implementing Budget planning. Which TWO actions must be completed to successfully import budget data from Microsoft Excel? (Choose two)
Configure the Budget planning document layout with the required financial dimensions.
Document layouts define how data is structured within the Excel template. Without a properly configured layout that includes the necessary financial dimensions, the system cannot correctly map the data from the Excel spreadsheet back into the corresponding budget plan fields during the import process, causing data validation failures.
Install the Dynamics 365 Finance Office add-in for Excel.
The Excel add-in acts as the bridge between the external spreadsheet and the Dynamics 365 database. It enables the authentication and data binding required to push updates back into the application. Without this component, the Excel file remains a local file and cannot interact with the budget planning modules.
Define a separate budget control rule for each Excel import task.
Manually create all budget register entries before importing the plan.
Enable the budget planning workflow for every user performing the import.
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Practice this domainThe MB-310 exam has 60–90 questions and must be completed in 120 minutes. The passing score is 700/1000.
Scenario-based questions covering exam objectives with detailed answer explanations.
The exam covers 5 domains: Implement Accounts Receivable, Credit, Collections, and Subscription Billing, Implement Financial Management, Implement and Manage Accounts Payable and Expenses, Manage Fixed Assets, Manage Budgeting. Questions are weighted by domain — higher-weight domains appear more on your actual exam.
No. These are original exam-style practice questions written against the official Microsoft MB-310 exam objectives. They are not copied from the real exam. Courseiva focuses on genuine understanding, not memorisation of braindumps.
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