Describe the core capabilities of the finance and operations apps →easyMultiple ChoiceObjective-mapped
MB-920 Practice Question: Describe the core capabilities of the finance and operations apps
A company is implementing Dynamics 365 Finance and needs to track inventory costs using a standard costing method. Which inventory model should they select?
⚠ Common exam trap
Many candidates confuse inventory valuation methods (FIFO, LIFO, weighted average) with the standard costing model, not realizing that standard cost is a distinct cost model in Dynamics 365 Finance that uses predetermined costs rather than actual cost flows.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Standard cost
Standard cost is the correct inventory model because it values inventory at predetermined costs, which aligns with the requirement to track inventory costs using a standard costing method. In Dynamics 365 Finance, the standard cost model uses predefined item costs and variances to capture differences between actual and standard costs, enabling cost control and analysis.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Standard cost
Why this is correct
Standard costing uses predetermined standard costs.
- ✗
LIFO
Why it's wrong here
LIFO is not supported in Dynamics 365 Finance.
- ✗
FIFO
Why it's wrong here
FIFO is a cost flow assumption, not a costing method.
- ✗
Weighted average
Why it's wrong here
Weighted average is a cost calculation method, not costing.
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This MB-920 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MB-920 exam.