MB-920 Describe Dynamics 365 Finance Practice Question
A company using Dynamics 365 Finance needs to allocate overhead costs to different departments based on square footage. What should they set up?
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
✓
Allocation rules in General ledger
Correct: Allocation rules in General ledger allow distribution of overhead costs based on defined criteria like square footage. Option A is wrong because Budget transfer is for moving budget amounts, not overhead allocation. Option B is wrong because Cost accounting focuses on internal cost analysis, not direct allocation rules. Option D is wrong because Fixed asset depreciation deals with asset value reduction, not cost allocation.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Budget transfer
Why it's wrong here
Budget transfer moves budget amounts between departments, not cost allocation.
- ✗
Cost accounting
Why it's wrong here
Cost accounting analyzes costs but does not set up allocation rules.
- ✓
Allocation rules in General ledger
Why this is correct
Allocation rules distribute overhead based on criteria like square footage.
- ✗
Fixed asset depreciation
Why it's wrong here
Fixed asset depreciation reduces asset value over time, not allocation.
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