MB-310 Implement Accounts Receivable, Credit, Collections, and Subscription Billing — Timed 20 Questions

Question 1

A subscription billing company wants to bill customers monthly in advance for a service that starts on the 15th of the month. They need to prorate the first invoice for the partial month. Which subscription billing feature should they use to ensure the first invoice reflects only the days from the 15th to the end of the month?

20 minute time limit — choose an answer to begin.

Accepted Answer

Proration method on the subscription. To prorate the first invoice for a partial month, the subscription must have a proration method configured. This method calculates the daily rate and applies it to the number of days in the partial period. Setting the subscription start date to the 15th triggers the proration based on the method, ensuring the first invoice covers only the remainder of the month.

Answer

Billing schedule with a custom interval

Answer

Charge setup with a specific start date

Answer

Billing cycle with a start date of the 15th

Question 2

A company uses Dynamics 365 Finance to manage customer payments. They need to automatically apply customer payments to the oldest outstanding invoices first, but also allow manual adjustment when necessary. Which configuration should the Accounts Receivable functional consultant set up?

Accepted Answer

Configure a payment specification with a settlement priority of 'Oldest first'.. Payment specifications in Accounts Receivable define the rules for automatic payment application. By configuring a payment specification with a settlement priority of 'Oldest first', the system automatically applies customer payments to the oldest outstanding invoices. This allows for efficient and consistent payment processing while still permitting manual adjustments when needed. The other options do not provide this functionality.

Answer

Enable 'Automatic settlement' on the customer posting profile.

Answer

Use a collection letter sequence to apply payments to the oldest invoices.

Answer

Set up a settlement priority on the Accounts receivable parameters.

Question 3

A legal entity must automatically place a customer on credit hold when the customer's credit limit is exceeded. The customer's balance is currently calculated using the 'Balance due' credit limit type, and the credit limit is 50,000. A sales order is entered for 55,000, but the customer's existing balance is 10,000. You need to ensure the order is blocked and the customer's credit status is updated to 'Credit hold' without manual intervention. What should you configure?

Accepted Answer

Create a credit limit rule with a rule type of 'Credit limit' and set the action to 'Credit hold'.. Credit management uses rules to automate credit decisions. A credit limit rule of type 'Credit limit' compares the customer's credit limit to the calculated balance (based on the credit limit type). When the condition is met, the specified action, such as 'Credit hold', is applied automatically. This enforces the credit policy without manual intervention, blocking sales orders and updating the customer's credit status.

Answer

Set the customer's credit rating to 'Poor' and enable the 'Credit limit' check in the Customer detail form.

Answer

Configure a credit limit of 50,000, set the credit limit type to 'Balance due', and enable the 'Credit hold' checkbox in the Accounts receivable parameters.

Answer

Set the credit limit type to 'Balance due with packing slip' and enable the 'Mandatory credit limit' parameter.

Question 4

A Dynamics 365 Finance consultant is setting up credit management for a company that wants to automatically place customers on credit hold based on specific conditions. The consultant needs to define credit hold rules. Which two actions must the consultant perform to enable automatic credit hold? (Choose two.)

Accepted Answer

Assign the credit hold rule to a credit management group and associate customers with that group.. To enable automatic credit hold, you must create a credit hold rule that defines the conditions for placing a customer on hold, and then assign that rule to a credit management group that includes the relevant customers. Enabling the feature and configuring parameters is a prerequisite, but the core actions are creating the rule and associating it with customers via the group.

Answer

Enable the Credit management feature in Feature management and configure credit management parameters.

Answer

Configure aging period definitions and link them to the credit hold rule.

Answer

Set up collection letter sequences and assign them to the credit management group.

Question 5

A company has a customer with an outstanding balance of $12,000 that is 90 days past due. The credit manager wants to automatically place a credit hold on this customer's account when the overdue balance exceeds $10,000, preventing new sales orders from being confirmed. The company uses Dynamics 365 Finance. What should you configure to achieve this?

Accepted Answer

Define an aging period definition for 90 days, then in Credit and collections parameters, set the 'Place on hold' option for that aging period with a threshold of $10,000.. The requirement is to automatically hold a customer when their overdue balance exceeds $10,000. Dynamics 365 Finance provides this capability through aging period definitions combined with credit and collections parameters. You define an aging period (e.g., 90 days) and then set a threshold in the parameters that triggers a hold. This ensures that sales orders cannot be confirmed for customers with significant overdue balances, enforcing credit policy automatically.

Answer

Configure a credit management rule of type 'Credit limit' with a threshold of $10,000 and set the action to 'Place on hold'.

Answer

Set up a collection letter sequence with a condition that places the customer on hold when the overdue balance exceeds $10,000.

Answer

Create a credit limit rule that sets the credit limit to $10,000 and enable the 'Mandatory credit limit' parameter.

Question 6

A company uses subscription billing in Dynamics 365 Finance. They need to bill a customer monthly for a service that started on January 15. The billing frequency is monthly, and the subscription is set to bill in advance. The company wants the first invoice to cover the period from January 15 to February 14, and subsequent invoices to cover full calendar months. Which billing schedule configuration should you use?

Accepted Answer

Set up a billing schedule with a billing frequency of 'Monthly', a billing start date of January 15, and a billing period start date of the first of the month, and enable proration for the first period.. Subscription billing supports proration and flexible billing period start dates. By setting the billing start date to the subscription start date and the billing period start date to the first of the month, the system prorates the first period and then bills on full calendar months. This automates the billing process and ensures accurate revenue recognition for the partial first period.

Answer

Set the billing schedule to 'Monthly' with a billing start date of January 15 and a proration method of 'Daily'.

Answer

Create a billing schedule with a billing frequency of 'Monthly' and a billing period start date of January 15, and set the 'Align billing periods' option to 'Calendar month'.

Answer

Use a billing schedule of 'Monthly' with a billing start date of February 1 and manually create a separate invoice for January 15 to January 31.

Question 7

A company uses subscription billing in Dynamics 365 Finance. A customer has a subscription that bills quarterly in advance. In the middle of a quarter, the customer requests to change the quantity of the service from 10 to 15 units. The company wants to bill the difference for the remainder of the quarter and adjust future billing schedules. Which action should the functional consultant take?

Accepted Answer

Modify the quantity on the existing subscription sales order line and use the Update billing schedule function to regenerate future billing lines.. In subscription billing, you can change the quantity on an existing subscription line and then run the Update billing schedule function. This regenerates future billing lines to reflect the new quantity and creates a catch-up line for the difference in the current period. This is the standard way to handle mid-term quantity changes while maintaining the subscription and its revenue recognition schedule.

Answer

Create a new sales order for the additional 5 units with a start date of the change date and a billing schedule that covers the remainder of the quarter.

Answer

Cancel the existing subscription and create a new subscription with the new quantity starting from the change date.

Answer

Create a credit memo for the unused portion of the original quantity and a new invoice for the new quantity for the remainder of the quarter.

Question 8

A subscription billing company needs to set up a billing schedule for a customer who will be invoiced quarterly for a service contract that starts on January 1, 2025, and ends on December 31, 2025. The invoice amount is $3,000 per quarter. Which configuration should you use to automatically generate the invoices?

Accepted Answer

Create a billing schedule with a frequency of 'Quarterly' and set the start date to January 1, 2025, and end date to December 31, 2025.. Subscription billing in Dynamics 365 Finance uses billing schedules to automate the creation of invoices for recurring contracts. By defining a billing schedule with a quarterly frequency and the contract period, the system generates invoices for each quarter. This eliminates manual invoice creation and ensures accurate billing. The billing schedule is linked to the subscription contract or sales order, and the system handles the rest.

Answer

Set up a recurring sales order with a recurrence pattern of every 3 months and an end date of December 31, 2025.

Answer

Configure a collection letter sequence that sends invoices quarterly based on the contract start date.

Answer

Create a free text invoice template with a quarterly recurrence and assign it to the customer.

Question 9

A company uses Dynamics 365 Finance and has a customer who is also a vendor. The customer has an outstanding invoice of $8,000, and the vendor has an outstanding bill of $5,000. The company wants to offset these amounts to settle both balances. Which functionality should you use to accomplish this?

Accepted Answer

Use the 'Vendor netting' feature in Accounts payable to offset the customer invoice against the vendor bill.. When a customer is also a vendor, you can offset their open transactions using the vendor netting feature in Accounts payable. This allows you to select the customer invoice and the vendor bill and settle them against each other, reducing both balances. The system generates the appropriate accounting entries to reflect the netting. This is more accurate and controlled than a manual journal entry, as it properly closes the original transactions.

Answer

Use the 'Settle transactions' form in Accounts receivable to apply the vendor bill against the customer invoice.

Answer

Configure a credit limit rule that allows offsetting between customer and vendor balances.

Answer

Create a journal entry to debit Accounts payable and credit Accounts receivable for $5,000.

Question 10

A company issues a credit note to a customer for returned goods. The credit note must be applied automatically against the customer's oldest outstanding invoice during the next payment run. The Accounts Receivable parameters already have 'Settle automatically' enabled. Which additional configuration is required to ensure the credit note is prioritized for automatic settlement?

Accepted Answer

Enable 'Automatic settlement' on the credit note's posting profile and set the 'Settlement priority' to 'Credit note first'.. Credit notes are applied automatically only when the posting profile associated with the credit note has 'Automatic settlement' enabled and the settlement priority is configured to apply credit notes first. The Accounts Receivable parameter 'Settle automatically' alone does not determine the matching order. Therefore, the posting profile configuration is required to ensure the credit note is prioritized against the oldest invoice.

Answer

Specify a default 'Offset account' for automatic settlement in the Accounts receivable parameters.

Answer

Set the credit note's 'Collection letter code' to 'Settle' in the Free text invoice form.

Answer

Configure the customer's 'Settlement priority' to 'Oldest first' on the Customer form.

Question 11

A credit analyst is setting up credit management for a new legal entity. The analyst must ensure that credit limits are enforced during sales order entry and that customers with overdue balances are automatically blocked. (Choose two.)

Accepted Answer

Enable the Credit limit check parameter in the Credit and collections parameters.. Enforcing credit limits requires enabling the Credit limit check parameter, and automatic blocking of overdue customers requires activating blocking rules in Credit management parameters. Together, these two settings provide the credit control the analyst needs for the new legal entity, while collection letters, credit ratings, and interest codes serve different purposes.

Answer

Configure interest codes and assign them to the customer profile.

Answer

Set up collection letter sequences for each aging bucket.

Answer

Define credit rating values on the customer master record.

Question 12

A Dynamics 365 Finance accounts receivable manager needs to write off a small uncollectible customer balance of $50. The manager wants to ensure that the write-off is recorded against a specific write-off account and that the customer's balance is reduced. Which journal type should be used?

Accepted Answer

Write-off journal. The write-off journal is the correct journal type to use when writing off an uncollectible customer balance. It is designed to reduce the customer's balance and post the offset to a specified write-off account. This ensures accurate tracking of bad debt and proper general ledger impact.

Answer

Collection letter journal

Answer

General journal

Answer

Payment journal

Question 13

A subscription billing administrator needs to bill a customer for a 24-month software subscription that includes a one-time setup fee in month 1 and a monthly recurring fee for months 2 through 24. The administrator must ensure the setup fee is recognized immediately while the recurring fee is recognized over the subscription term. Which configuration should the administrator use?

Accepted Answer

Create two billing schedules: one for the setup fee with immediate revenue recognition and one for the recurring fee with straight-line recognition over 24 months.. Using two billing schedules lets the administrator apply immediate recognition to the setup fee and straight-line recognition to the recurring fee over 24 months. This separation respects the different economic characteristics of the charges and provides accurate revenue reporting, whereas a single schedule or a revenue split would not achieve the required timing difference.

Answer

Create a single billing schedule with a 24-month term and include the setup fee as a line item in month 1.

Answer

Create a billing schedule for the recurring fee and post the setup fee as a free-text invoice with immediate revenue.

Answer

Use a single billing schedule with a revenue split that allocates the setup fee to a separate revenue account.

Question 14

A company uses collections management in Dynamics 365 Finance. The collections supervisor wants to automatically create collection letters for customers with overdue balances, escalating from a gentle reminder to a final notice. Which configuration should the functional consultant set up to achieve this?

Accepted Answer

Create a collection letter sequence with multiple collection letter codes, each with increasing days overdue and escalating text.. To automate escalating collection letters, you must create a collection letter sequence that contains multiple collection letter codes, each with a different number of days overdue and corresponding letter text. The sequence is then assigned to customers, and the system will automatically generate the appropriate letter based on the overdue days, achieving the desired escalation.

Answer

Set up a collection letter code for each escalation level and assign them to the customer's posting profile.

Answer

Configure the Accounts receivable parameters to enable 'Collection letter' and set the 'Collection letter sequence' to 'Automatic'.

Answer

Create a collection letter sequence and assign it to each customer's 'Collection letter' FastTab on the Customer form.

Question 15

A company uses subscription billing in Dynamics 365 Finance. They need to bill a customer for a subscription that includes a one-time setup fee and a recurring monthly fee. The setup fee should be billed immediately, and the monthly fee should be billed on the first of each month. Which configuration should the functional consultant use to achieve this?

Accepted Answer

Create two subscription billing items: one for the setup fee with a billing schedule of 'One-time', and one for the monthly fee with a billing schedule of 'Monthly'.. To bill a one-time setup fee immediately and a recurring monthly fee on the first of each month, you should create two separate subscription billing items. One item uses a 'One-time' billing schedule for the setup fee, and the other uses a 'Monthly' billing schedule for the recurring fee. This allows the system to generate the appropriate invoices automatically based on each item's schedule.

Answer

Create a billing schedule with two lines: one for the setup fee with a 'One-time' frequency and one for the monthly fee with a 'Monthly' frequency, and assign it to the subscription.

Answer

Set up a subscription with a billing schedule of 'Monthly' and configure the setup fee as a 'Recurring' charge with a frequency of 'One-time'.

Answer

Create a single subscription billing item with a 'Monthly' billing schedule and add the setup fee as a one-time charge on the first invoice.

Question 16

A company uses subscription billing in Dynamics 365 Finance. They need to set up a billing schedule that generates invoices monthly for a fixed quantity of a subscription, but the price must increase by 5% every 12 months. The subscription starts on January 1, 2025, and the first invoice should be generated on January 1, 2025. Which configuration should you use?

Accepted Answer

Create a billing schedule with a monthly frequency and add a price escalation rule that increases the price by 5% every 12 periods.. The correct approach is to create a billing schedule with a monthly frequency and attach a price escalation rule that increases the price by 5% every 12 periods. This rule is designed specifically for periodic price adjustments in subscription billing. Other options either apply to global parameters, static adjustments, or unrelated features, and would not achieve the required automatic annual increase.

Answer

Create a billing schedule with a monthly frequency, and set up a price increase in the subscription billing parameters.

Answer

Create a billing schedule with a monthly frequency and define a charge schedule with a 5% increase annually.

Answer

Set up a billing schedule with a monthly frequency and use a price adjustment in the item's sales price.

Question 17

A company uses subscription billing in Dynamics 365 Finance. They have a subscription that bills monthly. The customer wants to change the quantity of the subscription item mid-term. The change should take effect immediately, and the next invoice should reflect the new quantity. Which action should you perform?

Accepted Answer

Use the 'Change quantity' function on the subscription to update the quantity and apply it to the next invoice.. The correct action is to use the 'Change quantity' function on the subscription. This function is designed for mid-term adjustments, allows you to set an effective date, and automatically updates the next invoice with the new quantity. Other options either do not change the quantity, create unnecessary complexity, or lose subscription history.

Answer

Modify the billing schedule to change the quantity for the remaining periods.

Answer

Create a new subscription for the additional quantity and link it to the existing subscription.

Answer

Cancel the subscription and create a new one with the updated quantity.

Question 18

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?

Accepted Answer

Enable the Credit management feature in Feature management and configure credit management parameters.. The Credit management feature must be enabled and its parameters configured before any credit limits, rules, or customer credit groups can be set up. This provides the framework for automatically placing customers on credit hold when overdue balances exceed a threshold. Aging periods, collection letters, and payment methods do not automate credit holds based on balance thresholds.

Answer

Create a collection letter sequence and assign it to the customer's posting profile.

Answer

Configure credit card processing for the customer and set up payment terms to require prepayment.

Answer

Set up aging period definitions in Accounts receivable parameters and assign them to customer posting profiles.

Question 19

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?

Accepted Answer

Invoice grouping. Invoice grouping in subscription billing consolidates all charges for a customer into one invoice, regardless of subscription start dates or billing schedules. Configuring this setting ensures that multiple subscription charges are billed together, reducing the number of invoices and simplifying customer billing. It is the specific feature designed for this consolidation requirement.

Answer

Proration method

Answer

Charge setup

Answer

Billing cycle

Question 20

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?

Accepted Answer

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 automatically calculates prorated amounts for the first and last periods based on the schedule's start and end dates. This ensures accurate billing for partial months without manual intervention. Other options either change the billing frequency, rely on manual adjustments, or disable proration, none of which meet the requirement.

Answer

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.

Answer

Set the Billing frequency to Daily and manually adjust the invoice amounts for the first and last periods.

Answer

Configure a billing schedule with a monthly frequency and set the Invoice now option to Yes for all periods.