How to Perform Foreign Currency Revaluation in Dynamics 365 Finance
A multinational organization uses Dynamics 365 Finance with multiple currencies. They need to comply with local accounting standards that require revaluation of foreign currency balances at month-end. Which THREE actions should be performed?
Quick Answer
The correct answer is to run Accounts receivable foreign currency revaluation, along with Accounts payable foreign currency revaluation and General ledger foreign currency revaluation. This is because Dynamics 365 Finance requires separate revaluation processes for each subledger and the general ledger to adjust open balances to current exchange rates, ensuring compliance with local accounting standards at month-end. Bank foreign currency revaluation is also a valid action, but the question specifically asks for three actions, and the provided correct set excludes it in favor of the general ledger adjustment. On the MB-920 exam, this tests your understanding of the foreign currency revaluation steps and the distinction between revaluation (adjusting balances) and translation (reporting currency conversion). A common trap is confusing reporting currency translation with revaluation, or selecting “Exchange rate adjustment” which is not a standard function. Remember the mnemonic “GL, AR, AP” for the three core revaluation runs that directly adjust account balances.
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
✓
Run Accounts payable foreign currency revaluation
General ledger foreign currency revaluation adjusts account balances for exchange rate fluctuations. Accounts payable and accounts receivable foreign currency revaluation adjust vendor and customer balances, respectively. Reporting currency translation is used for converting financial statements to a reporting currency, not for revaluation. Therefore, the correct three actions are: Run Accounts payable foreign currency revaluation (A), Run General ledger foreign currency revaluation (C), and Run Accounts receivable foreign currency revaluation (D).
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Run Accounts payable foreign currency revaluation
Why this is correct
This revalues open vendor transactions in foreign currency.
- ✗
Run Reporting currency translation
Why it's wrong here
Reporting currency translation is for converting financial statements, not revaluation.
- ✓
Run General ledger foreign currency revaluation
Why this is correct
This revalues main account balances in the general ledger.
- ✓
Run Accounts receivable foreign currency revaluation
Why this is correct
This revalues open customer transactions in foreign currency.
- ✗
Run Exchange rate adjustment
Why it's wrong here
Exchange rate adjustment is not a standard process; revaluation is the correct term.
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Same concept, more angles
1 more way this is tested on MB-920
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A Dynamics 365 Finance user reports that the 'Customer payment journal' shows an incorrect exchange rate for a foreign currency payment. The exchange rate was updated yesterday. What is the most likely reason for the incorrect rate?
hard- A.The exchange rate table was not updated correctly.
- B.The currency is not set up for exchange rate updates.
- C.The rounding rule for the currency is incorrect.
- ✓ D.The exchange rate date on the journal is different from the payment date.
Why D: The exchange rate date on the journal may default to a date different from the payment date, causing the system to use an incorrect rate even if the rate table was updated correctly. Option A is wrong because the exchange rate table was updated, but the journal date mismatch is the key issue. Option B is wrong because if the currency were not set up for updates, payments would likely fail entirely. Option C is wrong because rounding rules affect the calculated amounts, not the rate applied.
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.