This MB-920 practice question tests your understanding of describe the core capabilities of the finance and operations apps. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company uses Dynamics 365 Finance. They need to create a new fiscal year and close the previous year. Which module should they use?
Budgeting
Why wrong: Budgeting is for budget planning, not fiscal year setup.
General ledger
General ledger manages fiscal years and year-end close.
Accounts payable
Why wrong: Accounts payable handles vendor transactions, not fiscal year setup.
Accounts receivable
Why wrong: Accounts receivable handles customer transactions, not fiscal year setup.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
General ledger
The General ledger module is the correct choice because fiscal year creation and year-end closing are core General ledger processes. In Dynamics 365 Finance, the General ledger module contains the fiscal calendar setup and the year-end close process, which transfers balances from the closing fiscal year to the new fiscal year's opening balances.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Budgeting
Why it's wrong here
Budgeting is for budget planning, not fiscal year setup.
General ledger
Why this is correct
General ledger manages fiscal years and year-end close.
Related concept
Read the scenario before looking for a memorised answer.
Accounts payable
Why it's wrong here
Accounts payable handles vendor transactions, not fiscal year setup.
Accounts receivable
Why it's wrong here
Accounts receivable handles customer transactions, not fiscal year setup.
Common exam traps
The trap here is that candidates may confuse the General ledger module with other financial modules like Budgeting, thinking that fiscal year setup is a budgeting activity, when in fact it is a core General ledger configuration.
Detailed technical explanation
Under the hood, the General ledger module uses the LedgerPeriod table to define fiscal periods and the FiscalCalendarYear entity to manage year structures. The year-end close process runs a batch job that creates opening transactions in the new fiscal year based on the closing balances, and it can be configured to automatically reverse specific accounts. A real-world scenario is when a company must close December 2023 and open January 2024; the General ledger module handles the transfer of retained earnings and ensures audit trails are maintained.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
What to study next
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FAQ
Describe the core capabilities of the finance and operations apps — This question tests Describe the core capabilities of the finance and operations apps — Read the scenario before looking for a memorised answer..
The correct answer is: General ledger — The General ledger module is the correct choice because fiscal year creation and year-end closing are core General ledger processes. In Dynamics 365 Finance, the General ledger module contains the fiscal calendar setup and the year-end close process, which transfers balances from the closing fiscal year to the new fiscal year's opening balances.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 24, 2026
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