MB-920 Describe Dynamics 365 Finance Practice Question
A company uses Dynamics 365 Finance with dual-currency accounting. They have transactions in both USD and EUR. The general ledger is set to USD, but a user posts a vendor invoice in EUR without specifying an exchange rate. The system posts the invoice at a rate of 0. The next day, the exchange rate for EUR/USD is 1.10. What is the impact on the general ledger?
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
✓
The invoice is posted with a zero USD amount, causing an imbalance.
When a vendor invoice is posted in a currency other than the ledger currency without an exchange rate specified, Dynamics 365 Finance uses the default exchange rate. If no default rate is configured, the rate is zero, resulting in a zero amount in the ledger currency (USD) and causing an imbalance in the general ledger. Option A is incorrect because the system does not reject the invoice; it posts with the available rate (zero). Option B is incorrect because the system does not automatically update the invoice after posting with a later exchange rate; the rate at the time of posting is used. Option D is incorrect because the system does not automatically create an exchange rate difference journal when the rate is zero; exchange rate differences are calculated only when the transaction is settled.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
The system rejects the invoice due to a missing exchange rate.
Why it's wrong here
The system posts with a rate of zero; it does not reject.
- ✗
The system automatically updates the invoice using the next day's rate of 1.10.
Why it's wrong here
The system does not retroactively update posted invoices.
- ✓
The invoice is posted with a zero USD amount, causing an imbalance.
Why this is correct
Without a rate, the USD amount is zero, leading to an unbalanced entry.
- ✗
The system posts the invoice and creates an exchange rate difference journal.
Why it's wrong here
Since the rate is zero, no exchange rate difference is recognized; the imbalance must be corrected manually.
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