MB-310 Practice Exam 3 — 20 Questions

Question 1

When configuring a bank reconciliation, what is the purpose of the 'Bank statement format'?

Accepted Answer

To translate the electronic bank file into a format the system can process.. The bank statement format defines how the data from the bank's electronic file is parsed into the Dynamics 365 system. This mapping is essential for the automated bank reconciliation process, which matches bank transaction records against the ledger entries. By correctly configuring this format, the system can interpret the incoming data, significantly reducing the manual effort required to reconcile accounts and ensuring high accuracy in cash flow reporting.

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To define the look and feel of the printed bank statement report.

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To encrypt the connection between the bank and Dynamics 365.

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To set the interest rate for the bank account balance.

Question 2

Your company uses the accrual basis of accounting. You need to ensure that expenses are recognized in the period they are incurred, even if the invoice is paid later. Which feature should you configure to automate this?

Accepted Answer

Accrual schemes. The Accrual schemes feature in Dynamics 365 Finance allows users to automatically distribute revenue or expenses over multiple periods. This is essential for compliance with accounting standards like GAAP or IFRS, which mandate matching revenues and expenses to the periods in which they occur. Configuring these schemes reduces manual journal entries and minimizes human error during month-end closing processes, ensuring consistency in financial reporting.

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General journal templates

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Financial dimension sets

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Allocation rules

Question 3

A user is receiving an error when trying to close the fiscal year. The error states that the opening transactions cannot be created because the account structure is incomplete. What should you check first?

Accepted Answer

Verify active account structures. The fiscal year closing process requires that all dimensions used in the previous year are currently active and included in an active account structure for the opening year. If a dimension was deactivated or removed from a structure, the system cannot generate the opening balance entries. Checking the active account structures ensures that the system has a valid path to post the calculated balances into the new fiscal year.

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Check the Main account setup

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Review Ledger parameters

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Check User permissions

Question 4

Refer to the exhibit. An accountant reports that they are still able to post invoices exceeding $100.00 without being blocked. Based on the provided policy JSON, why is this occurring?

Accepted Answer

The action is set to 'Warn', which allows users to bypass the validation.. The policy action is configured as 'Warn' rather than 'Reject' or 'Block'. In Dynamics 365 Finance, a 'Warn' action displays a notification to the user but does not prevent the document from being saved or posted. To stop the transaction entirely, the policy action must be updated to a restrictive level, ensuring strict adherence to the defined financial threshold and preventing manual overrides.

Answer

The rule_type is set to InvoiceTotal instead of LineItem.

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The enforce_on field is missing the 'Journal_Invoices' parameter.

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The threshold value is a string, which causes the rule to be ignored.

Question 5

A company requires that all expense reports are reviewed by a manager before they are posted to the General Ledger. Which configuration fulfills this requirement?

Accepted Answer

Configure an Expense management workflow.. Expense management workflows are the standard way to enforce the manager review requirement. By creating a workflow that includes an approval step assigned to the worker's manager, the system enforces the hierarchy before the document is finalized. This control is critical for preventing unauthorized spending and ensuring that all expenses comply with company policy prior to financial recognition in the ledger.

Answer

Enable the Expense report validation flag in Parameters.

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Assign the Manager role to the employee's user profile.

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Set the Posting profile to Require Approval.

Question 6

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?

Accepted Answer

Budget control configuration. Configuring budget control rules requires establishing a budget control configuration that defines which financial dimensions are checked, the budget funds availability rules, and the documents and journals subjected to validation. This ensures that organizational spending aligns strictly with approved financial targets before any transaction is successfully committed in the system.

Answer

Budget planning process workflow

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Budget register entry transaction definition

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Financial dimension configuration for integrating applications

Question 7

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.

Accepted Answer

Purchase requisitions. Purchase requisitions and purchase orders are core commitment-phase documents natively integrated with budget control in Microsoft Dynamics 365 Finance. Including these ensures that management can reserve budget funds early in the procurement lifecycle, preventing unauthorized financial commitments before invoices are ever received or posted.

Answer

Customer free text invoices

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Fixed asset depreciation proposals

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Bank deposit slips

Question 8

Refer to the exhibit. An accountant attempts to modify the acquisition price on a fixed asset record after posting a monthly depreciation run, resulting in the displayed error message. How should you resolve this issue?

Accepted Answer

Create and post an acquisition adjustment transaction through a fixed asset journal to modify the asset book value safely.. Once transactions such as depreciation are posted against a fixed asset book, core acquisition amounts are locked to maintain audit integrity. To correct or adjust the value, you must utilize designated adjustment journals rather than altering the original acquisition record directly.

Answer

Delete all posted depreciation transactions from the general ledger, update the acquisition record, and repost the depreciation.

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Change the asset status from Open to Suspended in the parameters table, make the correction, and reset the status.

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Perform a total asset disposal, create a new fixed asset ID with the correct value, and reacquire the asset.

Question 9

Your company uses vendor payment proposals in Microsoft Dynamics 365 Finance to select invoices for payment. During proposal generation, you need to ensure that invoices eligible for cash discounts are prioritized, and payments are restricted to a maximum total disbursement amount. Where should you configure these specific selection criteria?

Accepted Answer

In the Vendor payment proposal criteria dialog box when generating the payment.. Vendor payment proposals utilize proposal parameters and criteria filters to determine which invoices are selected during batch processing. Configuring minimum and maximum payment limits alongside cash discount preferences ensures cash flow optimization and adherence to liquidity targets established by treasury management.

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In the Accounts payable parameters under the Payment tab.

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In the Methods of payment setup form under Accounts payable setup.

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In the Cash discounts form by assigning priority numbers to each discount term.

Question 10

A company uses Dynamics 365 Finance Accounts Payable. The AP manager is configuring the Vendor invoice matching policy to enforce two-way matching for a specific vendor. The manager needs to ensure that the system validates the invoice against the purchase order and prevents posting if the quantity or price variance exceeds the tolerance. Which two configurations must the manager set up to achieve this? (Choose two.)

Accepted Answer

Create an invoice matching policy with a two-way matching rule and assign it to the vendor record.. To enforce two-way matching with tolerance-based posting prevention, the AP manager must create an invoice matching policy with a two-way matching rule and assign it to the vendor. Additionally, price and quantity tolerances must be defined in that policy so the system knows when a variance is acceptable and when it should block posting. These two configurations together provide the required control.

Answer

Enable the Match invoice totals and Match invoice lines options in the Accounts payable parameters.

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Enable the Invoice matching validation option in the Procurement and sourcing parameters for the vendor's procurement category.

Answer

Configure the Vendor collaboration workspace to require the vendor to confirm invoice quantities before posting.

Question 11

You are configuring the vendor invoice workflow to route invoices for approval based on the invoice amount. You need to ensure that invoices over $10,000 require approval by the accounts payable manager, while invoices under $10,000 are auto-approved. Which TWO configuration steps are required to achieve this? (Choose two.)

Accepted Answer

Configure the approval element with an assignment of 'User' and specify the accounts payable manager as the approver.. To route vendor invoices by amount, the workflow must include a conditional decision that evaluates the invoice total and branches accordingly. The approval element on the high-value branch must be assigned to the accounts payable manager. Together, these elements ensure invoices over $10,000 are routed for approval while lower-value invoices follow an auto-approval path.

Answer

Create a vendor invoice matching policy that rejects invoices over $10,000.

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Enable the 'Require approval' parameter in Accounts payable parameters for all vendor invoices.

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Set up a spending limit on the accounts payable manager's user record to enforce the $10,000 threshold.

Question 12

A US-based legal entity in Dynamics 365 Finance uses the calendar year as its fiscal year, and its fixed asset books are configured to automatically create depreciation adjustments when the fiscal calendar changes. In March, the company's leadership approves a change to the corporate fiscal calendar: the fiscal year will now begin on July 1 instead of January 1, effective immediately for the current year. The fixed asset manager must update the fiscal calendar in Dynamics 365 Finance so that depreciation projections and journal entries align with the new fiscal year. What is the FIRST action the manager should take?

Accepted Answer

In General ledger > Calendars > Fiscal calendars, select the existing calendar, and then create a new fiscal year with a July 1 start date.. Fiscal year boundaries for fixed assets are driven by the fiscal calendar referenced by the ledger and book. The correct approach is to add a new fiscal year with the July 1 start date inside the existing fiscal calendar, preserving historical periods and Calendar ID references. Replacing the calendar or altering depreciation profiles does not correctly shift period boundaries.

Answer

Run the Fixed asset calendar synchronization batch job to automatically shift all periods by six months.

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Create a new fiscal calendar with a July 1 start date and assign it to the Fixed asset ledger.

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Reconfigure each fixed asset book's depreciation profile to use a July 1 fiscal year start date.

Question 13

A company uses Dynamics 365 Finance with multiple legal entities. The corporate controller needs to consolidate financial results from two subsidiary legal entities into a parent legal entity. The subsidiaries use different chart of accounts, but the parent requires consolidated reporting using its own chart of accounts. The subsidiaries have transactions in different currencies. Which consolidation method should be used to meet these requirements?

Accepted Answer

Use the 'Consolidate online' feature with the 'Consolidate' option in General ledger, mapping subsidiary accounts to parent accounts and specifying exchange rates.. The 'Consolidate online' feature in General ledger is designed to consolidate multiple subsidiary legal entities into a parent legal entity. It supports mapping different charts of accounts via consolidation accounts and handles currency translation using specified exchange rates. This method is efficient for subsidiaries within the same Dynamics 365 Finance instance and meets all the stated requirements.

Answer

Use the 'Consolidate with import' feature, exporting subsidiary balances to Excel and importing them into the parent with manual account mapping.

Answer

Create a financial dimension for each subsidiary and use dimension-based reporting to combine balances.

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Set up intercompany accounting between the subsidiaries and the parent, and use intercompany journals to transfer balances.

Question 14

A subscription billing company needs to recognize revenue for a subscription that spans multiple periods. The subscription starts on January 1 and ends on December 31, with a total contract value of $12,000. Revenue should be recognized evenly over the subscription period. Which revenue recognition method should the functional consultant configure?

Accepted Answer

Straight line. Straight line revenue recognition is the appropriate method for subscriptions where revenue is earned evenly over the contract period. It allocates an equal amount to each period, ensuring consistent revenue recognition. The other methods are used for different scenarios, such as project-based or milestone-based contracts, and would not evenly distribute revenue.

Answer

Percentage of completion

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Milestone

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Completed contract

Question 15

An organization using Microsoft Dynamics 365 Finance wants to ensure that when a purchase requisition is submitted, it is checked against the available budget before it can proceed to approval. They have already configured budget control and enabled it for the legal entity. What must be configured next to enforce this check specifically on purchase requisitions?

Accepted Answer

Create a budget control rule that includes the Purchasing expenditure type and the appropriate budget dimensions.. To enforce budget check on purchase requisitions, a budget control rule must be created that includes the Purchasing expenditure type and the relevant dimensions. Budget control parameters and budget groups are supporting configurations, but the rule is what determines which documents are checked. Workflows are separate from budget control. Therefore, creating the appropriate budget control rule is the necessary next step.

Answer

Configure the budget control parameters to enable budget check for purchase requisitions.

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Set up a budget group for purchase requisitions and assign it to the budget control configuration.

Answer

Activate the budget control workflow for purchase requisitions in the workflow editor.

Question 16

A fixed asset has been fully depreciated but is still in use. The company decides to sell the asset for $5,000. The asset's value model has a net book value of $0. Which transaction type should be used to record the sale and remove the asset from the fixed asset subledger?

Accepted Answer

Disposal - sale. Disposal - sale is the transaction type designed to record the sale of a fixed asset. It removes the asset's cost and accumulated depreciation, records the cash proceeds, and posts any gain or loss to the appropriate ledger accounts. For a fully depreciated asset sold for $5,000, the gain is $5,000. Other transaction types like scrap or write down do not handle sales proceeds and would not correctly remove the asset from the subledger.

Answer

Write up

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Write down

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Disposal - scrap

Question 17

A fixed asset accountant needs to record the acquisition of a new server that was purchased on credit. Which journal type should be used in Dynamics 365 Finance to record the acquisition and ensure the correct ledger accounts are updated?

Accepted Answer

Fixed asset journal. The Fixed asset journal is the correct journal type for recording asset acquisitions. It updates both the fixed asset value model and the general ledger, ensuring that depreciation can be calculated and that the balance sheet reflects the new asset. Other journal types do not provide this integrated update, so they would leave the subledger and ledger out of balance.

Answer

Inventory to fixed asset journal

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General journal

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Project management and accounting journal

Question 18

A functional consultant is configuring a new legal entity in Dynamics 365 Finance. The organization wants to ensure that when users enter a main account, they are also required to specify a cost center financial dimension. The chart of accounts has already been created, and financial dimensions have been set up. Which configuration should the consultant apply to enforce this requirement?

Accepted Answer

Create an account structure that includes the Main account and Cost center dimensions, and mark the Cost center dimension as mandatory in the account structure.. Account structures are the primary mechanism to enforce which dimensions are required for a main account. By adding the Cost center dimension to the account structure and marking it as mandatory, any journal entry or document that uses a main account from that structure must include a cost center. This ensures consistent dimension capture without custom code.

Answer

Set up a custom validation rule on the Main account form using a data entity.

Answer

Configure a financial dimension set that includes Cost center and assign it to the main account.

Answer

Enable the 'Require dimensions' parameter in General ledger parameters and select Cost center.

Question 19

You are configuring a new fixed asset group for office furniture. The company policy requires that depreciation be calculated using the reducing balance method with a 20% annual rate, and that a half-year convention be applied in the first year of service. Which two parameters must you configure in the fixed asset group or book to meet these requirements? (Choose two.)

Accepted Answer

Depreciation convention set to Half year on the depreciation book.. To meet the policy, you must create a depreciation profile with the Reducing balance method and 20% rate, and set the depreciation convention to Half year on the depreciation book. These two configurations ensure the correct calculation method and first-year proration. The fixed asset group then references the book containing these settings.

Answer

Service life set to 5 years on the fixed asset group.

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Depreciation profile with method set to Straight line and percentage set to 20%.

Answer

Fixed asset group's depreciation rate set to 20% in the Fixed asset groups form.

Question 20

An accounts payable clerk must process a weekly payment run that pays all approved vendor invoices due within the next seven days while excluding invoices on payment hold. The clerk wants the system to generate the payment lines automatically rather than entering them manually. Which feature should the clerk use?

Accepted Answer

Vendor payment proposal. The vendor payment proposal reads open vendor transactions, applies selection criteria such as due date and payment status, and writes the resulting payment lines into a payment journal. Invoices on payment hold are excluded from selection, so the clerk can generate the weekly run automatically and then post it after review.

Answer

Vendor settlement

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Vendor invoice journal

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Vendor disbursement journal