MB-310 Practice Exam 4 — 20 Questions

Question 1

A finance user needs to review the budget versus actual expenditures for a specific department for the current year. Which Dynamics 365 Finance feature should they use?

Accepted Answer

Budget vs. actuals inquiry. The Budget vs. actuals inquiry is the standard feature for comparing budgeted amounts to actual expenditures. It allows filtering by dimensions such as department and by period, providing a clear view of remaining budget and spending. Other options are configuration or transaction entry pages that do not offer this comparative analysis.

Answer

Budget planning

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Budget control configuration

Answer

Budget register entries

Question 2

A company wants to charge a $15 wire transfer fee each time a vendor is paid by wire. The fee should be automatically added to the payment journal line when the wire payment method is used. What should you configure?

Accepted Answer

A vendor payment fee in the Payment fee setup, linked to the wire payment method and the vendor's bank account.. Payment fees in Dynamics 365 Finance are configured in the Payment fee setup, where you define the fee amount or percentage and associate it with a payment method, such as wire transfer. When a payment journal line uses that method, the fee is automatically calculated and added, ensuring consistent charging without manual intervention.

Answer

A bank transaction type of 'Fee' on the vendor's bank account.

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A miscellaneous charge on the vendor record under the Invoice tab.

Answer

A ledger accrual account for wire fees with a periodic journal entry.

Question 3

A new accounts payable clerk at your company processes a vendor invoice that includes a line for office supplies. The clerk needs to assign the correct main account and include a cost center financial dimension before posting. Which configuration element determines that the main account 601200 'Office Supplies Expense' must be accompanied by a cost center dimension, and prevents posting if it is missing?

Accepted Answer

An account structure that includes the Main Account and Cost Center dimensions and is assigned to the legal entity's ledger.. Account structures are the mechanism that controls which main account and dimension combinations are valid, and whether a dimension is required. When the structure includes Main Account and Cost Center, and the Cost Center is marked as required, the ledger will reject any posting that omits it. Assigning the structure to the legal entity's ledger activates this validation for all transactions, including vendor invoices.

Answer

A ledger accrual scheme that references the Office Supplies main account and a cost center.

Answer

A posting profile configured on the vendor group with a summary account for Cost Center.

Answer

A financial dimension set that includes Cost Center and is linked to the vendor master record.

Question 4

A wholesale distributor wants to automatically place a customer on credit hold when an invoice becomes 60 days past due. The credit manager needs the hold to prevent new sales orders from being confirmed but still allow payments to be posted. Which configuration should the credit manager set up?

Accepted Answer

Configure a credit management blocking rule with a 60-day past-due condition and a blocking type of All.. Credit management blocking rules are the automated mechanism that evaluates conditions such as days past due and assigns a blocking status. Setting a rule for 60 days past due with a blocking type of All prevents new sales orders from being confirmed while permitting payments, which is exactly the behavior the credit manager requires.

Answer

Set the customer's credit limit to zero.

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Enable the Credit limit check parameter on the Accounts receivable parameters form.

Answer

Create a collection letter sequence that triggers at 60 days past due.

Question 5

A Contoso financial analyst is preparing the annual budget and needs to enter original budget amounts for several departments. The organization wants the amounts to be available for budget control as soon as they are entered. Which budget register entry type should the analyst use?

Accepted Answer

Original budget. The original budget entry type is the correct choice for entering the initial approved budget for a fiscal year. When posted, original budget register entries increase available budget and are immediately considered by budget control rules. Transfer, revision, and encumbrance entry types serve different purposes and would not properly establish the initial budget amounts.

Answer

Revision

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Encumbrance

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Transfer

Question 6

A company is setting up a new fixed asset and wants to record the acquisition cost, but the asset will not be placed in service until a later date. The accountant needs to record the acquisition now and begin depreciating when the asset is placed in service. Which field on the fixed asset value model should be configured to control when depreciation starts?

Accepted Answer

Depreciation starting date. The depreciation starting date on the value model controls when depreciation begins. By setting it to the future in-service date, the acquisition can be recorded now while depreciation starts later. Other fields such as acquisition date, depreciation period, and service life affect reporting, calendar alignment, and duration, but not the start of depreciation.

Answer

Acquisition date

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Service life

Answer

Depreciation period

Question 7

A company is setting up a fixed asset that was acquired in a foreign currency. The company's accounting currency is USD, and the asset was purchased for 10,000 EUR. The exchange rate at acquisition was 1.2 USD/EUR. The company wants to ensure that the asset's historical cost in USD is correctly recorded and that any subsequent exchange rate fluctuations do not affect the asset's depreciation. Which setup should be used?

Accepted Answer

Record the acquisition in the fixed asset journal with the USD equivalent using the exchange rate at acquisition, and do not revalue the fixed asset for exchange rate changes.. Fixed assets in Dynamics 365 Finance are recorded in the accounting currency using the exchange rate at the acquisition date. The historical cost is fixed, and subsequent exchange rate movements do not affect the asset's value or depreciation. This treatment is consistent with accounting standards for property, plant, and equipment.

Answer

Record the acquisition in the fixed asset journal with the EUR amount and let the system convert using the daily exchange rate.

Answer

Set up the fixed asset in EUR and use a reporting currency for USD.

Answer

Use a revaluation group to periodically adjust the asset's value for exchange rate changes.

Question 8

A user in the Accounts payable department is trying to post an invoice journal for a vendor, but the system returns the error 'Posting has been cancelled because the accounting distribution is not fully allocated.' The invoice total is $12,000, but the distribution lines only sum to $10,000. What is the most likely cause of this error?

Accepted Answer

The accounting distribution lines for the invoice do not sum to the invoice total amount.. The error occurs because the accounting distribution lines total $10,000 while the invoice amount is $12,000. Dynamics 365 Finance requires that the sum of all accounting distributions equals the transaction amount before posting. The user must review and adjust the distribution lines to match the invoice total, ensuring the distribution is fully allocated.

Answer

The vendor's default posting profile is configured to require a purchase order.

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The invoice journal line does not have a financial dimension value for the main account.

Answer

The ledger account for the expense is blocked for manual entry.

Question 9

A company is setting up a new fixed asset value model for office furniture. The company wants to use the straight-line depreciation method over a useful life of 10 years. The asset will be acquired on January 1 for USD 12,000. The company uses a calendar year fiscal period. What will be the annual depreciation expense for this asset?

Accepted Answer

USD 1,200. The straight-line depreciation method allocates the depreciable basis evenly over the useful life of the asset. With an acquisition cost of USD 12,000, no salvage value, and a useful life of 10 years, the annual depreciation is USD 12,000 / 10 = USD 1,200. The system will post this amount each year, assuming a full year of depreciation in the first year, depending on the depreciation convention.

Answer

USD 2,400

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USD 1,000

Answer

USD 100

Question 10

A company uses Dynamics 365 Finance. You need to set up a customer payment proposal that includes only invoices with a due date on or before a specified date, and you want to automatically write off any cash discount that is not taken. Which configuration should you use?

Accepted Answer

Create a payment proposal with the Due date criteria and set the Post date and the Write off cash discount option on the payment proposal.. Payment proposals allow filtering by due date and include a Write off cash discount option. When enabled, any cash discount not taken is written off during payment posting. This is the correct configuration to include invoices due on or before a date and automatically write off unclaimed discounts.

Answer

Create a payment proposal with the Due date criteria and configure the Accounts payable parameters to write off cash discounts for all payments.

Answer

Create a payment proposal with the Due date criteria and set the Cash discount date criteria to include only invoices past the discount date.

Answer

Create a payment proposal with the Due date criteria and enable the Take cash discount option on the payment proposal.

Question 11

A company uses Dynamics 365 Finance and wants to ensure that when a fixed asset is sold, the gain or loss is automatically posted to the correct general ledger accounts. The consultant must configure the accounts that will be used for the disposal transaction. Where should the consultant define the ledger accounts for the disposal sale?

Accepted Answer

Fixed asset posting profile. The fixed asset posting profile is the central configuration that maps fixed asset transaction types to general ledger main accounts. For disposals, it specifies the accounts for the net book value, the sale proceeds, and the gain or loss. By setting up the disposal accounts in the posting profile, the system can automatically generate the correct ledger entries when a disposal-sale transaction is posted.

Answer

Inventory posting profile

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Accounts payable posting profile

Answer

General ledger posting profile

Question 12

A retail company uses Dynamics 365 Finance to manage vendor payments. The AP manager notices that a vendor invoice for $10,000 was posted with a payment term of Net 30, but the vendor offers a 2% discount if paid within 10 days. The manager wants the system to automatically calculate and apply the discount when the payment proposal includes the invoice within the discount period. What should the manager configure on the vendor invoice?

Accepted Answer

Set the payment term to 2/10 Net 30 and ensure the Cash discount field on the invoice line is populated with the discount percentage and date.. Cash discounts are configured through payment terms such as 2/10 Net 30 and can be overridden at the invoice line level. When the payment proposal selects an invoice within the discount date, Dynamics 365 Finance automatically calculates the discount and reduces the payment amount, ensuring the company captures the 2% savings without manual calculation.

Answer

Create a separate vendor record for the discounted payments and assign the 2% discount as a default payment fee.

Answer

Configure a vendor payment fee of -2% on the vendor record so that the payment proposal subtracts the discount from the payment amount.

Answer

Enable the Cash discount administration parameter in Accounts payable parameters and set the discount grace period to 10 days.

Question 13

A legal firm uses Dynamics 365 Finance to reimburse attorneys for bar association dues and continuing legal education (CLE) courses. The firm's policy states that bar association dues must be reimbursed at 100%, while CLE courses require prior approval from a managing partner. The accounts payable manager needs to configure the system so that these rules are enforced automatically when expense reports are submitted. What should the manager configure?

Accepted Answer

Create an expense policy with two policy rules: one that sets a 100% reimbursement limit for the Bar Dues category, and another that requires a receipt and approval for the CLE category.. Expense policies in Dynamics 365 Finance are the correct mechanism to enforce category-specific reimbursement rules such as percentage limits, receipt requirements, and approval conditions. By creating a policy with a 100% limit for Bar Dues and an approval-required rule for CLE, the AP manager ensures the system validates each expense line against firm policy at submission, preventing non-compliant reimbursements without manual intervention.

Answer

Create a workflow for expense reports that routes Bar Dues and CLE lines to the managing partner for approval before any reimbursement is processed.

Answer

Configure the vendor record for the bar association and CLE provider with a default payment term that automatically approves reimbursement at submission.

Answer

Set up a per diem rule for each attorney that covers bar dues and CLE costs, and assign the per diem to the corresponding expense categories.

Question 14

A consultant is implementing subscription billing for a company that offers software as a service (SaaS). The company wants to bill customers in advance for a 12-month subscription, but wants to recognize revenue monthly over the subscription period. The consultant sets up a billing schedule with a yearly frequency and a 12-month duration. Which additional configuration is required to defer revenue and recognize it monthly?

Accepted Answer

Set up a revenue deferral schedule and assign it to the item group used for the subscription.. Revenue deferral schedules in Subscription billing allow you to defer revenue from an invoice and recognize it over a specified schedule. Assigning a deferral schedule to the item group ensures that when the annual invoice is posted, the revenue is deferred and then recognized monthly. This aligns with the requirement to bill annually but recognize revenue monthly.

Answer

Configure a billing schedule with a yearly frequency and enable the Invoice now option for all periods.

Answer

Change the billing schedule frequency to monthly and set the Prorate option to Yes.

Answer

Set up a collection letter sequence to remind customers of the annual payment.

Question 15

A company is setting up fixed assets in Dynamics 365 Finance. They need to create a new asset that will be depreciated using the reducing balance method. Which two configurations are required to enable this? (Choose two.)

Accepted Answer

Create a depreciation profile with the method 'Reducing balance' and set the percentage.. To enable reducing balance depreciation, you must first create a depreciation profile with the reducing balance method and set the percentage. Then, you assign that profile to a value model or depreciation book that is linked to the fixed asset. These two steps ensure the system calculates depreciation using the reducing balance method. The other options either misplace the method configuration or confuse posting profiles with depreciation profiles.

Answer

Set up a fixed asset group with the 'Reducing balance' depreciation method.

Answer

Create a depreciation book with the 'Reducing balance' method and attach it to the asset.

Answer

Configure the fixed asset posting profile to use the reducing balance method.

Question 16

A company uses Dynamics 365 Finance to process vendor payments. The treasury team wants to generate a payment proposal for a specific vendor group that includes only invoices due in the next 14 days, and they want to exclude any invoices that are on hold. After the proposal is generated, they need to review and remove selected invoices before posting. What should they do?

Accepted Answer

Create a payment journal, use the Vendor payment proposal function with a due date filter and a vendor group filter, then manually delete unwanted lines before posting.. The Vendor payment proposal function inside a payment journal is designed exactly for this scenario. It accepts filters such as vendor group and due date, automatically excludes invoices that are on hold, and produces editable journal lines. Because the lines are editable before posting, the team can review the proposal and remove specific invoices, which satisfies both the filtering and the manual review requirements.

Answer

Use the Settle transactions form on the vendor record to mark invoices for payment, then post a payment journal without a proposal.

Answer

Run the Vendor aging report filtered by due date, then create a manual payment journal and enter each invoice line by hand.

Answer

Configure a payment schedule on the vendor record and let the system post payments automatically when invoices become due.

Question 17

A vendor invoice is entered with a total of $10,000. The vendor offers a cash discount of 1% if paid within 10 days. The invoice is paid on day 8. The payment journal is created without manually adjusting the amount. What will be the result when the payment is posted?

Accepted Answer

The payment will be $9,900 and the discount of $100 will be posted to the cash discount account.. When a vendor has a cash discount code and payment is made within the discount period, the system automatically reduces the payment amount by the discount and posts the discount to the cash discount ledger account. In this scenario, the payment becomes $9,900 and $100 is posted to the discount account. Manual adjustment is not required.

Answer

The payment will be $10,000 and the discount will be ignored because the invoice was not marked for discount.

Answer

The payment will be $9,900 but the discount will be posted as a debit to the vendor account.

Answer

The payment will be $10,000 and the discount will be posted as a separate credit to the vendor.

Question 18

A controller is reviewing a vendor invoice that was posted with an incorrect expense amount. The invoice is already posted and the accounting period is still open. The controller needs to correct the expense account and amount while preserving a clear audit trail, and the vendor balance must also be adjusted. Which action should the controller take?

Accepted Answer

Reverse the posted vendor invoice and then enter a new vendor invoice with the corrected expense amount and account.. The supported correction for a posted vendor invoice is to reverse it and then enter a corrected invoice. Reversal creates offsetting ledger and subledger entries, so the vendor balance is restored, and the new invoice records the correct expense account and amount. Both documents remain in the system, providing the audit trail the controller needs. Direct edits or deletions of posted transactions are not allowed.

Answer

Post a general journal entry to move the amount between the expense accounts and leave the vendor balance unchanged.

Answer

Delete the posted vendor invoice and re-enter it with the correct information.

Answer

Edit the posted vendor invoice journal and change the expense amount and main account directly.

Question 19

A company is implementing Dynamics 365 Finance and needs to ensure that when a purchase order invoice is posted, the expense is allocated to the correct department and cost center. The company uses financial dimensions for Department and Cost Center. The vendor invoice must inherit these dimensions from the purchase order line. What should you configure to achieve this?

Accepted Answer

Configure the purchase order line to include the Department and Cost Center dimensions, and ensure that the invoice line inherits them.. The correct approach is to enter the Department and Cost Center dimensions on the purchase order line. When the invoice is generated from the purchase order, the invoice line inherits these dimensions by default. This ensures the expense is allocated correctly without manual re-entry. The system's default behavior carries dimensions from PO to invoice.

Answer

Set up a financial dimension defaulting rule on the vendor account.

Answer

Set up a posting definition to split the expense based on the Department dimension.

Answer

Create an account structure that includes Department and Cost Center, and set them as mandatory.

Question 20

A company uses Dynamics 365 Finance. They need to automatically create collection activities when customer invoices become overdue. Collection activities should be generated based on aging periods, and the system must prevent duplicate activities for the same invoice. Which configuration should you use?

Accepted Answer

Configure collection activities in the Collections page and enable the 'Create collection activities automatically' parameter, then define aging period definitions.. To automatically create collection activities based on aging periods and avoid duplicates, you must configure the collections parameters to enable automatic activity creation and define aging period definitions. The system uses these definitions to identify overdue invoices and then creates activities, checking for existing open activities. Collection letters, workflows, and interest codes serve different purposes and do not fulfill the requirement.

Answer

Create a workflow for collection letters that triggers when an invoice is overdue.

Answer

Set up interest codes and assign them to customer posting profiles to generate activities.

Answer

Set up collection letter sequences and assign them to customer posting profiles.