This MB-920 practice question tests your understanding of describe the core capabilities of the finance and operations apps. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A retail company uses Dynamics 365 Finance and Operations for financial reporting. They need to ensure that intercompany transactions are eliminated in consolidated financial statements. Which module should they use?
Budgeting
Why wrong: Budgeting is for planning, not elimination.
Accounts payable
Why wrong: Accounts payable handles vendor transactions, not eliminations.
Fixed assets
Why wrong: Fixed assets manage asset lifecycle, not financial consolidation.
Consolidations
Consolidations eliminates intercompany transactions and combines financial statements.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Consolidations
The Consolidations module in Dynamics 365 Finance and Operations is specifically designed to combine financial data from multiple legal entities into a single set of consolidated financial statements. It includes built-in functionality to automatically eliminate intercompany transactions and balances, ensuring that the consolidated reports reflect only external financial activity.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Budgeting
Why it's wrong here
Budgeting is for planning, not elimination.
Accounts payable
Why it's wrong here
Accounts payable handles vendor transactions, not eliminations.
Fixed assets
Why it's wrong here
Fixed assets manage asset lifecycle, not financial consolidation.
Consolidations
Why this is correct
Consolidations eliminates intercompany transactions and combines financial statements.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
The trap here is that candidates may confuse the Consolidations module with standard financial reporting tools or assume that intercompany eliminations are handled automatically by the general ledger, when in fact they require a dedicated module with explicit elimination rules.
Detailed technical explanation
The Consolidations module uses a consolidation company as a hub to aggregate data from source legal entities, applying currency translation rules and elimination rules defined in the system. Elimination rules can be set up to automatically reverse intercompany accounts (e.g., intercompany receivables/payables) during the consolidation process, using journal entries that are generated and posted to the consolidation company. In a real-world scenario, a retail chain with separate legal entities for each region can run monthly consolidations that automatically remove intercompany sales and purchases, preventing double-counting in the group P&L.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
What to study next
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FAQ
Describe the core capabilities of the finance and operations apps — This question tests Describe the core capabilities of the finance and operations apps — Read the scenario before looking for a memorised answer..
The correct answer is: Consolidations — The Consolidations module in Dynamics 365 Finance and Operations is specifically designed to combine financial data from multiple legal entities into a single set of consolidated financial statements. It includes built-in functionality to automatically eliminate intercompany transactions and balances, ensuring that the consolidated reports reflect only external financial activity.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 24, 2026
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