MB-920 Describe Dynamics 365 Finance Practice Question
A manufacturing company uses Dynamics 365 Finance. The finance team notices that the 'Work in process' (WIP) account balances are not clearing correctly after production orders are completed. The production orders use the 'Standard cost' costing method. What is the most likely cause of this issue?
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 production order variances have not been calculated and posted.
In standard costing, any variances between actual costs and standard costs must be calculated and posted to clear the Work in Process (WIP) account. If variances are not posted, the WIP balance remains uncleared. Option B is incorrect because an unapproved BOM version prevents production from being released or costed, but does not directly cause WIP clearing issues. Option C is incorrect because the cost category type (indirect vs. direct) affects how costs are applied but not the clearing of WIP. Option D is incorrect because item coverage group settings pertain to planning and replenishment, not to accounting transactions like WIP clearing.
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 production order variances have not been calculated and posted.
Why this is correct
Variances must be calculated and posted to clear WIP.
- ✗
The bill of materials (BOM) version is not approved.
Why it's wrong here
BOM approval affects costing but not WIP clearing.
- ✗
The cost category for the production route is set to 'Indirect cost' instead of 'Direct'.
Why it's wrong here
Cost category type does not prevent WIP clearing.
- ✗
The item coverage group is set to 'Period' instead of 'Requirement'.
Why it's wrong here
Coverage group affects planning, not accounting.
Visual reference
Go deeper
Related to this question
About these practice questions
Courseiva writes every MB-920 question from scratch — 930 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or dumps. Learn why practice questions differ from exam dumps →
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.