hardMultiple ChoiceObjective-mapped
MB-920 Practice Question: A global company uses Dynamics 365 Finance and…
A global company uses Dynamics 365 Finance and needs to comply with multiple tax regulations. They want to automatically apply the correct tax rate based on the customer's address. What should be configured?
⚠ Common exam trap
Test-takers frequently confuse 'Tax determination by address' with 'Tax exempt numbers', thinking that entering a tax exempt number will automatically apply the correct rate, when in fact tax exempt numbers only indicate exemption status and do not determine the applicable tax rate.
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
✓
Tax determination by address
To automatically apply the correct tax rate based on the customer's address in Dynamics 365 Finance, you configure 'Tax determination by address'. This feature uses the delivery address or primary address of the customer to determine the appropriate sales tax group and item sales tax group, enabling compliance with multiple tax regulations without manual intervention.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Tax determination by address
Why this is correct
Automatically applies correct tax.
- ✗
Tax exempt numbers
Why it's wrong here
For exemptions.
- ✗
Tax reporting
Why it's wrong here
For reporting, not calculation.
- ✗
Manual tax overrides
Why it's wrong here
No automation.
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