Courseiva

Microsoft Dynamics 365 Fundamentals ERP MB-920 (MB-920) — Questions 451–525

966 questions total · 13pages · All types, answers revealed

Take a mock examExam hub
Page 6

Page 7 of 13

Page 8
451
MCQmedium

A company uses the master plan configuration shown in the exhibit. What is the effect of setting IncludeDemandForecast to true?

A.The master plan will calculate capacity requirements based on forecast
B.The master plan will only consider forecasted demand and ignore sales orders
C.The master plan will consider both forecasted demand and existing sales orders
D.The master plan will require manual input of forecast data
AnswerC

IncludeDemandForecast adds forecasted demand to the planning calculation.

Why this answer

Option A is correct because including demand forecast means the plan will consider forecasted demand in addition to actual sales orders. Option B is wrong because it says only forecast, ignoring actual orders. Option C is wrong because capacity requirements are not directly related to demand forecast inclusion.

Option D is wrong because manual adjustment is not required; the plan automatically considers forecast.

Full explanation →
452
MCQmedium

A company uses Dynamics 365 Supply Chain Management. They want to ensure that when a purchase order is received, the system automatically creates a quality order for inspection. Which configuration is required?

A.Set up a quality association for purchase order product receipt
B.Set inventory status to blocking
C.Configure nonconformance management
D.Define item sampling for the product
AnswerA

A quality association links quality order creation to a process event like product receipt.

Why this answer

Option A is correct because a quality association links a quality order creation to a process event like product receipt. Option B is wrong because item sampling defines which items are tested, not the trigger. Option C is wrong because nonconformance management handles failed inspections.

Option D is wrong because inventory status is for inventory control, not triggering inspections.

Full explanation →
453
MCQhard

A company uses Dynamics 365 Supply Chain Management with lot tracking. They need to ensure that the system enforces the first-expiry-first-out (FEFO) principle during picking. What configuration is required?

A.Set the warehouse parameter 'Use batch expiration dates' to Yes.
B.Configure the reservation hierarchy to reserve by batch and then location.
C.Set the location directive strategy to 'FEFO' for the relevant work order type.
D.Define a batch attribute for expiration date and set it as active for picking.
AnswerC

FEFO strategy in location directives prioritizes expiration dates.

Why this answer

Option A is correct because location directives with a 'FEFO' strategy prioritize picking lots with earliest expiry dates. Option B is wrong because reservation hierarchies affect reservation, not picking order. Option C is wrong because batch attributes are for quality, not expiry.

Option D is wrong because warehouse parameters include general settings, not FEFO strategy.

Full explanation →
454
MCQmedium

Refer to the exhibit. A sales order in Dynamics 365 Finance has a line discount of 10% and a header discount of 5%. What is the net amount for the line item after both discounts?

A.$1,500.00
B.$1,425.00
C.$1,350.00
D.$1,282.50
AnswerD

Correct: 1500 - 10% = 1350, then -5% = 1282.50.

Why this answer

First apply line discount: 10 * 150 = 1500, minus 10% = 1350. Then apply header discount: 1350 minus 5% = 1282.50.

Full explanation →
455
Drag & Dropmedium

Drag and drop the steps to configure a new inventory item in Dynamics 365 Supply Chain Management in the correct order.

Drag steps to the numbered slots on the right, or tap a step then tap a slot.

Steps
Order

Why this order

Inventory item setup requires creating a product, selecting type, entering details, and releasing.

Full explanation →
456
MCQeasy

A company uses Dynamics 365 Supply Chain Management to manage inventory. They want to use the Inventory turnover ratio to analyze how quickly inventory is sold. The finance team needs to see this ratio on a dashboard. You need to configure the system to calculate and display the inventory turnover ratio. You have the following options: A. Use the Inventory value report and calculate the ratio manually in Excel. B. Use the Power BI content pack for Dynamics 365 Supply Chain Management, which includes inventory turnover measures. C. Use the Inventory aging report to estimate turnover. D. Use the Warehouse Management module to track movements and calculate turnover. Which option should you choose?

A.Use the Inventory value report and calculate the ratio manually in Excel.
B.Use the Power BI content pack for Dynamics 365 Supply Chain Management, which includes inventory turnover measures.
C.Use the Warehouse Management module to track movements and calculate turnover.
D.Use the Inventory aging report to estimate turnover.
AnswerB

Option B is correct because it provides automated calculation.

Why this answer

Option B is correct because the Power BI content pack includes pre-built measures for inventory turnover. Option A is incorrect because it requires manual calculation. Option C is incorrect because aging report is for aging, not turnover.

Option D is incorrect because WMS is for warehouse operations, not financial analytics.

Full explanation →
457
MCQeasy

A company wants to optimize inventory levels by analyzing historical sales data and predicting future demand. Which module in Dynamics 365 Supply Chain Management should they use?

A.Warehouse management
B.Demand forecasting
C.Production control
D.Transportation management
AnswerB

Demand forecasting predicts future demand based on historical data.

Why this answer

Demand forecasting in Dynamics 365 Supply Chain Management uses historical sales data and machine learning models to predict future demand, enabling optimized inventory levels. It integrates with the master planning module to generate replenishment suggestions, directly addressing the scenario's need to analyze past data and forecast demand.

Exam trap

The trap here is that candidates may confuse Warehouse management with inventory optimization, but Warehouse management is about physical storage and movement, not predictive analytics, which is the core of demand forecasting.

How to eliminate wrong answers

Option A is wrong because Warehouse management focuses on physical inventory operations like receiving, picking, and shipping, not on analyzing historical sales data or predicting future demand. Option C is wrong because Production control manages manufacturing processes, such as production orders and bill of materials, and does not include demand prediction capabilities. Option D is wrong because Transportation management handles logistics and freight planning, not historical sales analysis or demand forecasting.

Full explanation →
458
MCQhard

Contoso Ltd. is a global manufacturing company with legal entities in the US (USD), UK (GBP), and Germany (EUR). They use Dynamics 365 Finance. The CFO wants a consolidated financial report that combines data from all entities into USD, using month-end exchange rates. The consolidation must be performed monthly, and adjustments should be automatically eliminated. The company also needs to maintain separate accounting rules for each entity (e.g., GAAP vs. IFRS). You are tasked with configuring the consolidation process. What should you do?

A.Configure intercompany accounting and use the intercompany reconciliation report.
B.Export each entity's trial balance to Excel, apply exchange rates, and import to a consolidated company.
C.Create a general journal to manually post consolidated entries using exchange rates.
D.Set up a consolidation group, define exchange rates, configure elimination rules, and run the consolidation process online.
AnswerD

This is the standard method for consolidation in Dynamics 365 Finance.

Why this answer

Option B is correct because the consolidation module in Dynamics 365 Finance allows you to set up consolidation groups, define exchange rates, run consolidation online with elimination rules, and handle different accounting frameworks. Option A is wrong because intercompany accounting is for transactions between entities, not for consolidation reporting. Option C is wrong because the general journal is for manual adjustments, not automated consolidation.

Option D is wrong because export/import is manual and not suitable for monthly consolidation.

Full explanation →
459
MCQeasy

A company uses Dynamics 365 Human Resources. They need to track employee training and certifications. Which module should they use?

A.Benefits management
B.Organization administration
C.Learning management
D.Leave and absence
AnswerC

Learning management tracks training and certifications.

Why this answer

The Learning management module in Dynamics 365 Human Resources is specifically designed to track employee training, certifications, and skill development. It allows administrators to define courses, assign them to employees, record completion, and manage expiration dates for certifications, directly meeting the requirement.

Exam trap

The trap here is that candidates often confuse the Learning management module with the Organization administration module, mistakenly thinking that organizational structures include training tracking, but Organization administration only handles hierarchies and parameters, not learning records.

How to eliminate wrong answers

Option A is wrong because Benefits management handles employee compensation and benefits like health insurance and retirement plans, not training or certifications. Option B is wrong because Organization administration manages organizational structures, hierarchies, and common parameters, but does not include functionality for tracking learning activities or certifications. Option D is wrong because Leave and absence manages time-off requests, accruals, and absence calendars, with no capability to track training or certification records.

Full explanation →
460
MCQhard

A warehouse manager queries the on-hand inventory for item L0101 and receives the JSON output above. Currently, how many units of item L0101 are available to be picked for new orders?

A.500
B.300
C.200
D.700
AnswerB

300 is available after subtracting reserved from total on hand.

Why this answer

The on-hand inventory for item L0101 is 700 units, but 200 units are physically reserved for existing orders. The available-to-pick quantity is the on-hand total minus physically reserved inventory, which equals 500 units. However, the correct answer is 300 because the JSON output shows 'OnHandTotal: 700', 'ReservedPhysical: 200', and 'AvailablePhysical: 300' — the 'AvailablePhysical' field directly represents the quantity available to be picked for new orders in Dynamics 365 Supply Chain Management.

Exam trap

The trap here is that candidates often confuse the total on-hand quantity (700) or the simple subtraction (500) with the actual available-to-pick quantity, overlooking the 'AvailablePhysical' field in the JSON output which is the definitive value for picking in Dynamics 365 Supply Chain Management.

How to eliminate wrong answers

Option A is wrong because 500 represents the on-hand total minus physically reserved inventory, but the 'AvailablePhysical' field in the JSON output explicitly shows 300, which is the actual available-to-pick quantity. Option C is wrong because 200 is the physically reserved quantity, not the available-to-pick quantity. Option D is wrong because 700 is the total on-hand inventory, which includes reserved stock and is not available for new orders.

Full explanation →
461
Multi-Selectmedium

Your organization is configuring Accounts payable in Dynamics 365 Finance. You need to set up vendor posting profiles. Which THREE components are part of a vendor posting profile?

Select 3 answers
A.Summary account
B.Discount account
C.Settlement account
D.Inventory account
E.Accounts receivable account
AnswersA, B, C

Correct: The summary account is for vendor balances.

Why this answer

Option A is correct because the summary account is used for vendor balances. Option C is correct because the settlement account is used for payment settlements. Option E is correct because the discount account is used for cash discounts.

Option B is wrong because inventory accounts are in inventory posting profiles. Option D is wrong because the AR account is for customer balances.

Full explanation →
462
MCQmedium

Northwind Traders uses Dynamics 365 Supply Chain Management for their distribution operations. They have a requirement to manage inventory across multiple warehouses and legal entities. They want to transfer finished goods from their manufacturing subsidiary (legal entity A) to their distribution subsidiary (legal entity B) at a transfer price that includes a markup. The transfer should be recorded as a sale in entity A and a purchase in entity B. They plan to use intercompany functionality. The finance team has set up intercompany parameters, but the transactions are not creating the expected intercompany orders. The administrator has verified that both entities are configured correctly in the system. However, the intercompany orders are not generated automatically when a purchase order is created in entity B. What should the administrator check next?

A.Ensure that the intercompany relationship is defined for the specific item in the item mapping setup.
B.Confirm that the inventory unit of measure is the same in both entities.
C.Check that the intercompany parameters in entity B are set to 'Create intercompany purchase orders automatically'.
D.Verify that the vendor associated with entity A is set up as an intercompany vendor in entity B.
AnswerA

Without item-level mapping, intercompany orders are not automatically generated.

Why this answer

Intercompany orders require that the intercompany relationship is defined on the item level, not just the legal entity level. The item must be mapped between entities to trigger automatic order creation. The vendor setup on the purchase order is correct but without item mapping, no interchain.

Intercompany parameters are global, but item relations are per item.

Full explanation →
463
MCQmedium

You are a Dynamics 365 Finance functional consultant for a company that operates in a country where tax regulations require the use of tax codes with different rates for various goods and services. The company needs to ensure that sales invoices automatically calculate tax based on the item's tax group and the customer's tax exemption status. They also need to generate tax reports for authorities. Requirements: 1) Configure tax codes and groups for automated tax calculation. 2) Handle tax exemptions. 3) Use standard Dynamics 365 Finance features. Which configuration should you set up?

A.Create sales tax codes, sales tax groups, and item sales tax groups. Assign tax exemption certificates to customers as needed.
B.Use the 'Tax calculation' service in Dynamics 365 Finance.
C.Configure the 'General ledger parameters' to apply a default tax rate to all transactions.
D.Set up a custom workflow for tax approval on each invoice.
AnswerA

This configuration enables automated tax calculation and exemption handling.

Why this answer

Setting up sales tax codes, sales tax groups, and item sales tax groups, and assigning tax exemption certificates to customers, allows automatic tax calculation and reporting. Option A is correct.

Full explanation →
464
MCQmedium

Refer to the exhibit. This XML snippet shows a workflow configuration in Dynamics 365 Finance. What is the purpose of this workflow?

A.To enforce budget control on purchase orders
B.To facilitate vendor collaboration
C.To automate purchase order approval based on amount
D.To match purchase orders with invoices
AnswerC

The workflow auto-approves small purchase orders and routes large ones for manual approval.

Why this answer

The workflow configuration in Dynamics 365 Finance uses a condition based on the purchase order amount to trigger an approval step. This is the core purpose of a purchase order approval workflow: to automatically route purchase orders for approval when they exceed a defined monetary threshold, ensuring proper authorization before the order is processed.

Exam trap

The trap here is that candidates confuse the purpose of a purchase order approval workflow (which automates approval routing based on conditions like amount) with other purchase order-related features such as budget control, vendor collaboration, or invoice matching, which serve entirely different business processes.

How to eliminate wrong answers

Option A is wrong because budget control enforcement is a separate feature that checks available budget against actual expenditures, not a workflow approval process based on amount. Option B is wrong because vendor collaboration is a portal-based feature for vendors to view and respond to purchase orders, invoices, and contracts, not a workflow for internal approval routing. Option D is wrong because matching purchase orders with invoices is handled by the accounts payable invoice matching process (three-way matching), not by a purchase order approval workflow.

Full explanation →
465
MCQmedium

Refer to the exhibit. The SQL-like query is used to retrieve data from Dynamics 365 Finance. What does this query return?

A.All general journal entries for a specific main account.
B.Main accounts with total debits greater than 10,000, ordered by total descending.
C.Main accounts with total amounts less than 10,000, ordered ascending.
D.All main accounts with any activity in 2025.
AnswerB

The query sums amounts and filters >10000.

Why this answer

Option B is correct. The query selects MainAccount and sum of Amount from GeneralJournalEntry for a specific date range, groups by MainAccount, filters groups with total amount > 10000, and orders by total descending. Option A is wrong because it does not filter by a specific account.

Option C is wrong because it returns only accounts with total > 10000. Option D is wrong because it is not ordered ascending.

Full explanation →
466
MCQeasy

A warehouse manager wants to assign workers to specific zones and track their performance. Which warehouse management feature should be used?

A.Location directives
B.Work templates
C.Mobile device menu items
D.Labor management
AnswerD

Labor management enables assignment of workers to zones and performance tracking.

Why this answer

Labor management in Dynamics 365 Supply Chain Management is specifically designed to assign workers to zones and track their performance, including metrics like productivity and efficiency. This feature enables warehouse managers to define labor standards, monitor worker activities, and generate performance reports, directly addressing the scenario's requirements.

Exam trap

The trap here is that candidates often confuse mobile device menu items (which handle task execution) with labor management (which handles assignment and performance tracking), because both involve worker interaction with the system.

How to eliminate wrong answers

Option A is wrong because location directives are used to determine pick and put locations for inventory movements, not for assigning workers or tracking performance. Option B is wrong because work templates define the structure of warehouse work (e.g., steps for picking or replenishment), not worker assignments or performance tracking. Option C is wrong because mobile device menu items configure the user interface for scanning and executing warehouse tasks, but they do not provide labor assignment or performance monitoring capabilities.

Full explanation →
467
Multi-Selecthard

A distribution company uses Dynamics 365 Finance and Operations. The warehouse manager wants to improve inventory accuracy and reduce picking errors. Which THREE features should they implement?

Select 3 answers
A.Location directives
B.Demand forecasting
C.Cycle counting
D.Vendor collaboration
E.Warehouse mobile device support
AnswersA, C, E

Location directives automate where items are stored and picked, reducing errors.

Why this answer

Location directives are correct because they guide warehouse workers to specific storage and picking locations, ensuring items are placed and retrieved from the correct bins. This directly reduces picking errors by enforcing system-defined paths and locations, improving inventory accuracy through standardized warehouse operations.

Exam trap

The trap here is that candidates confuse planning features like demand forecasting with operational warehouse controls, assuming any inventory-related feature improves accuracy, when only direct warehouse execution tools (location directives, cycle counting, and mobile device support) address picking errors and real-time accuracy.

Full explanation →
468
MCQeasy

A company uses Dynamics 365 Supply Chain Management for production. They want to automatically create production orders when sales orders are entered for make-to-order items. Which planning method should they use?

A.Discrete manufacturing with BOMs
B.Engineer-to-order (ETO) planning
C.Make-to-order (MTO) planning
D.Master planning with automatic firming
AnswerC

MTO automatically generates production orders from sales orders.

Why this answer

Make-to-order (MTO) creates production orders automatically from sales orders. Master planning can also, but MTO is the specific method. Engineer-to-order (ETO) requires engineering changes.

Discrete manufacturing is a type, not a planning method.

Full explanation →
469
MCQhard

A company uses Dynamics 365 Supply Chain Management with advanced warehouse management. They need to enforce that workers scan a license plate when completing a transfer order receipt. Which configuration should be used?

A.Configure the mobile device display settings
B.Modify the mobile device menu item for receipt
C.Set up cycle counting thresholds
D.Define work templates for transfer orders
AnswerB

The menu item can require license plate scanning.

Why this answer

Mobile device menu items can enforce license plate scanning. Option C is correct. Option A is for mobile device display settings.

Option B is for cycle counting. Option D is for work creation.

Full explanation →
470
Drag & Dropmedium

Drag and drop the steps to configure a new vendor in Dynamics 365 Supply Chain Management in the correct order.

Drag steps to the numbered slots on the right, or tap a step then tap a slot.

Steps
Order

Why this order

Vendor creation involves navigating to vendors, creating a new record, entering details, assigning group, and saving.

Full explanation →
471
MCQhard

A global manufacturer uses Dynamics 365 Supply Chain Management. They need to configure a process that automatically generates purchase orders when inventory drops below a predefined level, based on real-time demand. Which feature should they use?

A.Vendor collaboration
B.Master planning
C.Demand forecasting
D.Reorder point planning
AnswerD

Generates orders when stock drops to reorder point.

Why this answer

Option D is correct because Reorder point planning creates purchase orders when stock hits a reorder point. Option A is incorrect because Master planning is broader. Option B is incorrect because Demand forecasting predicts, doesn't generate orders.

Option C is incorrect because Vendor collaboration is for communication.

Full explanation →
472
MCQmedium

A manufacturing company uses Dynamics 365 Finance. The finance team notices that the actual budget expenditures for the current fiscal year are significantly higher than planned. They need to identify variances and adjust the budget accordingly. Which feature should they use to analyze the budget vs. actuals and make adjustments?

A.Budget planning
B.Budget register entries
C.Fixed asset management
D.Budget control configuration
AnswerD

Budget control configuration enables tracking of actual expenditures against budget and identifying variances.

Why this answer

Budget control configuration allows monitoring of budget funds and analysis of budget vs. actuals. Option A (Budget planning) is for planning, not analysis. Option B (Budget register entries) is for recording, not analysis.

Option D (Fixed asset management) is unrelated.

Full explanation →
473
MCQmedium

A company uses Dynamics 365 Supply Chain Management and wants to optimize logistics costs by consolidating shipments from multiple orders to the same customer. Which feature should they use?

A.Transportation management
B.Warehouse management
C.Sales and marketing
D.Master planning
AnswerA

Transportation management supports load building and shipment consolidation.

Why this answer

Option A is correct because the Transportation management module allows shipment consolidation based on rules like same customer, delivery address, or route. Option B is wrong because the Warehouse management module handles internal warehouse operations. Option C is wrong because the Sales and marketing module manages sales orders, not logistics optimization.

Option D is wrong because the Master planning module calculates supply requirements, not shipment consolidation.

Full explanation →
474
MCQhard

A company uses Dynamics 365 Finance with multiple legal entities. The accounting manager notices that when intercompany transactions are posted, the due-to and due-from accounts are not automatically created. The intercompany setup appears correct, but the transactions fail to generate the intercompany accounting entries. What should you verify first?

A.Check the intercompany accounting setup for the due-to and due-from account mappings.
B.Confirm that the intercompany currency is properly configured.
C.Verify that the chart of accounts includes intercompany accounts.
D.Ensure each legal entity has a default financial dimension set.
AnswerA

The intercompany accounting setup defines the offset accounts.

Why this answer

Option C is correct because intercompany transactions require the intercompany accounting setup to define the offset accounts. Option A is wrong because the chart of accounts is necessary but not the root cause. Option B is wrong because currency setup affects exchange rates, not the generation of due-to/due-from.

Option D is wrong because legal entity setup is required but unless accounting rules are defined, entries won't be created.

Full explanation →
475
MCQhard

A company uses Dynamics 365 Supply Chain Management and wants to implement a process where products are tracked from raw material to finished goods using unique identifiers. Which feature should they enable to achieve this?

A.Batch tracking
B.Serial number tracking
C.Product configuration
D.Catch weight
AnswerB

Serial number tracking assigns a unique identifier to each individual item for traceability.

Why this answer

Option B is correct because serial number tracking allows unique identification and traceability of individual items throughout the supply chain. Option A is wrong because batch tracking groups items with common attributes. Option C is wrong because catch weight is for variable-weight items.

Option D is wrong because product configuration is for configurable products.

Full explanation →
476
Multi-Selectmedium

Which TWO of the following are valid modules in Dynamics 365 Finance? (Select two.)

Select 2 answers
A.Accounts payable
B.Customer relationship management
C.Budgeting
D.Project management
E.Power Apps
AnswersA, C

Accounts payable is a core module for vendor transactions.

Why this answer

Accounts payable and Budgeting are core modules in Dynamics 365 Finance. Option C is a system, not a module. Option D is a Power Platform component.

Option E is not a standard module.

Full explanation →
477
Multi-Selectmedium

Which TWO features are available in Dynamics 365 Supply Chain Management to support lean manufacturing?

Select 2 answers
A.Batch balancing
B.Value stream mapping
C.Product configuration
D.Quality orders
E.Kanban scheduling
AnswersB, E

Value stream mapping is a lean manufacturing feature.

Why this answer

Option A and D are correct. Lean manufacturing features include kanban scheduling and value stream mapping. Option B is wrong because product configuration is for configurable products.

Option C is wrong because batch balancing is for process manufacturing. Option E is wrong because quality orders are for inspection.

Full explanation →
478
Multi-Selecthard

Which THREE of the following are valid configuration options for posting profiles in Dynamics 365 Finance? (Choose three.)

Select 3 answers
A.Customer posting profile
B.Ledger posting setup
C.Vendor posting profile
D.Sales tax posting group
E.Inventory posting profile
AnswersB, C, D

Ledger posting setup defines posting rules for various transactions.

Why this answer

Correct: A, B, and D. Posting profiles define how transactions post to the general ledger. Option C (Customer posting profile) is a separate setup for accounts receivable.

Option E (Inventory posting profile) is also separate.

Full explanation →
479
Multi-Selectmedium

Which THREE modules are part of Dynamics 365 Finance?

Select 3 answers
A.Human resources
B.Budgeting
C.General ledger
D.Accounts payable
E.Project management and accounting
AnswersB, C, D

Used for budget planning and control.

Why this answer

Options A, B, and D are correct. General ledger, Accounts payable, and Budgeting are core modules. Option C is incorrect because Project management and accounting is part of Dynamics 365 Project Operations, not Finance.

Option E is incorrect because Human resources is a separate Dynamics 365 app.

Full explanation →
480
MCQhard

A company using Dynamics 365 Finance notices that some purchase orders are being created with incorrect tax codes. The tax codes are determined by the vendor and item. What should they configure to enforce correct tax codes?

A.Assign appropriate Sales tax groups and Item sales tax groups
B.Set up tax authorities and reporting codes
C.Define tax codes for each vendor and each item
D.Configure tax exemption numbers for vendors
AnswerA

The combination of Sales tax group (from vendor) and Item sales tax group (from item) determines the tax code used.

Why this answer

Option D is correct because the Sales tax group and Item sales tax group determine the tax code applied. By setting up these groups correctly, the system will automatically select the correct tax code. Option A is wrong because tax codes are assigned to groups, not directly.

Option B is wrong because tax authorities are for reporting. Option C is wrong because tax exemptions are for exempt customers.

Full explanation →
481
MCQeasy

A company needs to track the purchase order commitment against the budget in Dynamics 365 Finance. Which feature should they use?

A.Recurring journal
B.Budget control
C.Transaction posting definitions
D.Encumbrance accounting
AnswerB

Budget control enables tracking of purchase order commitments against available budget.

Why this answer

Budget control tracks commitments and actual expenditures against the budget. Option C is correct. Option A is wrong because it is for encumbrances but not specifically for purchase orders.

Option B is wrong because it is for posting definitions. Option D is wrong because it is for recurring transactions.

Full explanation →
482
MCQhard

Refer to the exhibit. A warehouse uses location directives for sales picking with FEFO strategy. Workers are unable to pick from bulk locations even though there is stock. What is the most likely cause?

A.The location profile 'BULK' is not set to allow picking.
B.The items do not have expiration dates set.
C.The location directive is missing a line for the 'PICK' profile.
D.The strategy should be FIFO instead of FEFO.
AnswerA

If bulk locations are not allowed for picking, they won't be selected.

Why this answer

Option A is correct because the location directive only includes 'BULK' and 'PICK' profiles, but if the location profile is not assigned to any location, it will not be used. However, the exhibit shows both profiles, so the issue is likely that the 'BULK' locations have been assigned a profile that does not match. Actually, the more likely cause is that the 'BULK' location profile is not set up for picking or the location directive sequence is incorrect.

But among options, Option A is the most plausible: the location profile 'BULK' might not be set to allow picking. Option B is wrong because FEFO works with expiry dates. Option C is wrong because the directive includes both profiles.

Option D is wrong because the strategy is FEFO, not FIFO.

Full explanation →
483
Multi-Selectmedium

Which TWO actions should a supply chain manager take to set up vendor collaboration in Dynamics 365 Supply Chain Management?

Select 2 answers
A.Configure the vendor collaboration portal in the Dynamics 365 Finance and Operations app
B.Set up a separate Microsoft Entra ID tenant for vendors
C.Enable the vendor for collaboration in the vendor master record
D.Publish the procurement catalog to the vendor portal
E.Add vendor users as external contacts in the system
AnswersC, E

Vendors must be enabled for collaboration in the vendor master.

Why this answer

Option B is correct because vendor collaboration requires setting up external vendor users as contacts. Option D is correct because vendors must be enabled for collaboration in the vendor master. Option A is wrong because the vendor collaboration portal is a separate interface, not part of the main Supply Chain Management UI.

Option C is wrong because vendor collaboration does not require setting up a separate tenant; it uses the same tenant. Option E is wrong because the procurement catalog is for internal use, not vendor collaboration.

Full explanation →
484
MCQhard

You are the Dynamics 365 Finance administrator for a multinational manufacturing company, Contoso Ltd. The company operates in three legal entities: Contoso US (US), Contoso Germany (DE), and Contoso Japan (JP). Contoso US is the primary legal entity and consolidates all intercompany transactions. The CFO requires a consolidated financial report that includes actuals and budget data from all legal entities. The company uses shared data tables for customers and vendors across all legal entities. However, each legal entity maintains its own chart of accounts and fiscal calendars. The company recently implemented Dynamics 365 Finance and needs to set up consolidation to meet the CFO's requirements. You need to configure the consolidation process. Which course of action should you take?

A.Export financial data from each legal entity to Excel and manually create consolidated reports.
B.Use the Consolidate with import process to bring data from each subsidiary into Contoso US.
C.Set up a separate consolidation legal entity and use the Consolidate online process to transfer balances from all subsidiaries.
D.Run the General ledger consolidation process directly in the Contoso US legal entity to include subsidiaries.
AnswerC

This method automates consolidation into a dedicated consolidation company.

Why this answer

Option B is correct because consolidating online with a consolidation company is the recommended approach when you need to combine financial data from multiple legal entities into a single reporting entity. This method allows you to set up a separate legal entity (the consolidation company) to store consolidated results. It supports different charts of accounts and fiscal calendars across legal entities, as required.

Option A is incorrect because exporting data to Excel is manual and not suitable for ongoing, automated consolidation. Option C is incorrect because the General ledger consolidation process in the consolidation company requires the consolidation company to be set up first; you cannot run it directly in Contoso US without a consolidation company. Option D is incorrect because the Consolidate with import method is designed for importing data from external sources, not for consolidating existing Dynamics 365 Finance legal entities.

Full explanation →
485
Multi-Selectmedium

Which TWO of the following are features of Dynamics 365 Finance for managing intercompany transactions?

Select 2 answers
A.Intercompany accounting
B.Consolidation
C.Fixed asset management
D.Elimination rules
E.Budget control
AnswersA, D

Intercompany accounting manages transactions between legal entities.

Why this answer

Option A and Option D are correct. Intercompany accounting allows transactions between legal entities, and elimination rules remove intercompany activity for consolidation. Option B is wrong because consolidation is a separate feature for combining financials.

Option C is wrong because budget control is for budget management. Option E is wrong because fixed asset management is for asset tracking.

Full explanation →
486
MCQhard

A retail company using Dynamics 365 Commerce is experiencing slow performance in the point of sale (POS) system during peak hours. The company uses a hybrid deployment with on-premises back-office and cloud-based POS. What is the most likely cause of the performance issue?

A.On-premises data center overload
B.Network latency between on-premises and cloud environments
C.Incorrect POS hardware profile configuration
D.Insufficient POS terminal memory
AnswerB

High latency during peak hours can cause slowdowns when the POS system needs to communicate with the on-premises back-office.

Why this answer

In a hybrid deployment where the on-premises back-office handles data processing and the cloud-based POS relies on real-time communication, network latency between the two environments is the most likely cause of slow performance during peak hours. The POS system must send requests (e.g., inventory lookups, transaction processing) to the on-premises back-office over the internet, and high latency or packet loss can significantly degrade response times, especially under heavy load.

Exam trap

The trap here is that candidates may assume on-premises data center overload (Option A) is the cause, overlooking that the POS is cloud-based and the bottleneck is the network link between environments, not the back-office server's processing capacity.

How to eliminate wrong answers

Option A is wrong because on-premises data center overload would affect all systems hosted there, but the POS is cloud-based and its performance is primarily dependent on network connectivity to the back-office, not the data center's internal load. Option C is wrong because incorrect POS hardware profile configuration (e.g., wrong printer or scanner settings) would cause device-specific failures or errors, not general slow performance during peak hours. Option D is wrong because insufficient POS terminal memory would cause local application crashes or out-of-memory errors, not network-dependent slowness that correlates with peak usage.

Full explanation →
487
MCQeasy

A company uses Dynamics 365 Finance and wants to create financial statements for external reporting. Which tool should they use?

A.Excel integration
B.Management Reporter
C.Financial reporting
D.Power BI
AnswerC

Financial reporting is designed for financial statements.

Why this answer

Financial reporting (option C) is the correct tool because it is the dedicated, built-in reporting solution in Dynamics 365 Finance for creating GAAP-compliant external financial statements such as balance sheets, income statements, and cash flow statements. It uses the financial dimensions and main accounts from the general ledger to generate highly formatted, regulatory-ready reports without requiring external tools.

Exam trap

The trap here is that candidates confuse the legacy Management Reporter tool (option B) with the current Financial reporting module, not realizing that Management Reporter is deprecated and no longer the correct answer for Dynamics 365 Finance.

How to eliminate wrong answers

Option A is wrong because Excel integration is a data export/import utility for ad-hoc analysis and data manipulation, not a tool for generating structured, formatted external financial statements. Option B is wrong because Management Reporter is a legacy tool from earlier Dynamics AX versions (prior to Dynamics 365) and is not the recommended or supported solution for financial reporting in Dynamics 365 Finance; it has been superseded by the Financial reporting module. Option D is wrong because Power BI is an analytics and visualization platform for dashboards and interactive reports, not a tool designed to produce the precise, row-and-column formatted financial statements required for external regulatory compliance.

Full explanation →
488
MCQmedium

You are reviewing a budget plan import file for Dynamics 365 Finance. The exhibit shows a JSON snippet for a budget plan line. Which of the following is a required field that is missing from this snippet?

A.BudgetPlanLine.BudgetPlanLineDetail
B.BudgetPlanLine.Period
C.BudgetPlanLine.Account
D.BudgetPlanLineDetail.BudgetModel
AnswerA

The BudgetPlanLineDetail object is required to specify the distribution of the line amount.

Why this answer

Option A is correct because the BudgetPlanLine.BudgetPlanLineDetail is a required field in the budget plan import file for Dynamics 365 Finance. This field contains the detailed financial data (such as amounts and currency) that must be associated with each budget plan line. Without it, the import process fails as the system cannot map the line to its corresponding financial details.

Exam trap

The trap here is that candidates often confuse the required fields at the line level with those at the detail level, assuming that fields like Period or Account are mandatory on the BudgetPlanLine object, when in fact they are handled within the BudgetPlanLineDetail.

How to eliminate wrong answers

Option B is wrong because BudgetPlanLine.Period is not a required field; the period is typically derived from the budget plan header or the line's date range, not explicitly required in the JSON snippet. Option C is wrong because BudgetPlanLine.Account is not a required field at the line level; the account dimension is specified within the BudgetPlanLineDetail structure, not as a direct property of BudgetPlanLine. Option D is wrong because BudgetPlanLineDetail.BudgetModel is not a required field; the budget model is defined at the budget plan header level, not within the line detail.

Full explanation →
489
MCQmedium

A company uses Dynamics 365 Finance and wants to streamline the process of reconciling bank statements with ledger entries. What feature should they use?

A.Budget control
B.Cash flow forecasting
C.Payment proposals
D.Bank reconciliation
AnswerD

Bank reconciliation matches bank statements to ledger entries.

Why this answer

Correct: Bank reconciliation automates matching. Option A is wrong because Cash flow forecasting is for predictions. Option B is wrong because Payment proposals generate payments.

Option D is wrong because Budget control is for budget enforcement.

Full explanation →
490
MCQmedium

A manufacturer uses Dynamics 365 Supply Chain Management. The production scheduler needs to see real-time capacity load on work centers to avoid overloading. Which workspace or tool should they use?

A.Cost management workspace
B.Warehouse management workspace
C.Gantt chart in production control
D.Master planning workspace
AnswerC

The Gantt chart shows real-time capacity load on work centers.

Why this answer

Option D is correct because the Gantt chart in production control provides real-time capacity visualization. Option A is wrong because the master planning workspace focuses on material planning, not capacity. Option B is wrong because the cost management workspace is for costing.

Option C is wrong because the warehouse management workspace is for warehouse operations.

Full explanation →
491
MCQhard

Refer to the exhibit. A Dynamics 365 Finance system has a vendor invoice workflow configured as shown. A vendor invoice with an amount of $15,000 is submitted. Who will be required to approve the invoice?

A.First the director, then the manager
B.First the manager, then the director
C.Only the manager
D.Only the director
AnswerB

Both conditions are met: manager approves first step, director approves final step.

Why this answer

Option D is correct because the first step checks if amount > 10000, which is true, so the manager approves. The second step always requires director approval. Therefore both the manager and director must approve.

Option A is wrong because only the manager is not enough. Option B is wrong because only the director is not enough. Option C is wrong because the manager approves first, then the director.

Full explanation →
492
Multi-Selecthard

A company uses Dynamics 365 Supply Chain Management. They want to implement a lean manufacturing process. Which THREE features should they configure?

Select 3 answers
A.Bill of materials
B.Route operations
C.Production flows
D.Kanban rules
E.Work cells
AnswersC, D, E

Production flows are used in lean manufacturing.

Why this answer

Production flows are the core modeling element for lean manufacturing in Dynamics 365 Supply Chain Management, defining the sequence of activities and the movement of materials through a value stream. They are required to set up a lean production environment and are the foundation for kanban rules and work cells.

Exam trap

The trap here is that candidates often confuse lean manufacturing features with discrete manufacturing features, mistakenly selecting BOMs or route operations instead of recognizing that production flows, kanban rules, and work cells are the three specific configurations required for lean manufacturing in Dynamics 365.

Full explanation →
493
MCQhard

A multinational corporation using Dynamics 365 Finance needs to revalue foreign currency bank accounts at month-end. The finance manager wants to automate this process and ensure that exchange rate differences are posted to the correct accounts. What is the best approach?

A.Create manual journal entries for each bank account using the month-end exchange rate.
B.Use the General journal to post exchange rate adjustments.
C.Configure exchange rate types for each currency pair.
D.Use the Foreign currency revaluation feature in General ledger.
AnswerD

This feature automates revaluation and posts to specified accounts.

Why this answer

Option D is correct because the Foreign currency revaluation feature in Dynamics 365 Finance automates the process and posts differences to the specified accounts. Option A is wrong because manual journal entries are error-prone and not automated. Option B is wrong because exchange rate types define rates, not automate revaluation.

Option C is wrong because the General journal does not automatically revalue accounts.

Full explanation →
494
MCQhard

A company uses Dynamics 365 Supply Chain Management with advanced warehouse management. They need to enforce strict FIFO (first in, first out) picking for perishable goods. Which configuration ensures that the oldest inventory is picked first?

A.Configure a reservation hierarchy with expiration date as the primary dimension
B.Adjust the work template to order by location
C.Set up location profiles with strict picking order
D.Modify the mobile device menu item for picking
AnswerA

Reservation hierarchies can prioritize oldest inventory for FIFO.

Why this answer

Option A is correct because reservation hierarchies allow you to set the picking order by expiration date or receipt date, enabling FIFO. Option B is wrong because location profiles define storage constraints, not picking order. Option C is wrong because mobile device menu items define user interactions.

Option D is wrong because work templates define work creation but not priority by age.

Full explanation →
495
MCQmedium

A manufacturing company uses Dynamics 365 Finance and Operations to manage its production orders. The production manager notices that the actual material consumption for a batch is significantly higher than the expected consumption. The system is configured for automatic posting of consumption. What should the production scheduler check first to troubleshoot the discrepancy?

A.Review the vendor quality scorecard for the raw material supplier.
B.Ensure the financial dimensions on the production order are correctly assigned.
C.Check the BOM consumption method (e.g., backflush) and ensure it matches the production process.
D.Verify that the work center capacity is correctly configured.
AnswerC

Incorrect consumption method can cause over-consumption; this is the first diagnostic step.

Why this answer

Option C is correct because the BOM consumption method (e.g., backflush, manual, or at operation) directly controls how and when material consumption is recorded against a production order. If the system is set to automatic posting but the method (e.g., backflush at start or finish) does not match the actual production process, the system may consume materials incorrectly, leading to discrepancies between expected and actual consumption. Checking this setting is the logical first step before investigating other potential causes.

Exam trap

The trap here is that candidates often jump to quality or capacity issues (options A or D) because they seem related to 'higher consumption', but the question specifically targets the system's automatic posting logic, which is governed by the BOM consumption method.

How to eliminate wrong answers

Option A is wrong because the vendor quality scorecard relates to supplier performance and material quality, not to how the system calculates or posts material consumption; a quality issue would affect yield or scrap, not the consumption posting logic itself. Option B is wrong because financial dimensions control cost accounting and reporting segmentation, not the physical consumption of materials; incorrect dimensions would cause posting errors in the general ledger but would not change the quantity of material consumed. Option D is wrong because work center capacity configuration affects scheduling and load, not material consumption; capacity issues might delay production but do not alter how the system posts BOM consumption.

Full explanation →
496
Multi-Selecthard

Which THREE are benefits of using Dynamics 365 Supply Chain Management's AI and Copilot features?

Select 3 answers
A.Automated supplier negotiation
B.Improved demand forecasting
C.Reduced need for manual data entry
D.Optimized inventory levels
E.Enhanced production scheduling
AnswersB, D, E

AI enhances demand forecasting accuracy.

Why this answer

Option B is correct because Dynamics 365 Supply Chain Management's AI and Copilot features use machine learning models to analyze historical sales data, market trends, and external factors (e.g., weather, economic indicators) to generate more accurate demand forecasts. This reduces stockouts and overstock situations by predicting future demand with higher precision than traditional statistical methods.

Exam trap

The trap here is that candidates may confuse general automation benefits (like reduced data entry) with specific AI/Copilot capabilities, or assume supplier negotiation is automated when it is not a standard feature in Dynamics 365 Supply Chain Management.

Full explanation →
497
Multi-Selecthard

Which THREE are valid options for configuring product lifecycle states in Dynamics 365 Supply Chain Management? (Select exactly three.)

Select 3 answers
A.In development
B.Discontinued
C.Deleted
D.Active
E.Obsolete
AnswersA, B, D

Standard state.

Why this answer

Option A is correct because 'In development' is a default lifecycle state in Dynamics 365 Supply Chain Management that indicates a product is being created and is not yet available for transactions. This state prevents the product from being used in sales, purchasing, or production processes until it is released.

Exam trap

The trap here is that candidates confuse 'Obsolete' with 'Discontinued', but 'Obsolete' is not a default lifecycle state in Dynamics 365 Supply Chain Management, and 'Deleted' is never a valid option because the system uses state-based deactivation instead of physical deletion.

Full explanation →
498
MCQhard

Contoso, Ltd. is a manufacturer of custom machinery. They use Dynamics 365 Supply Chain Management with production orders and subcontracting. A production order for a custom drilling machine requires a specialized heat treatment process that is performed by an external vendor. The heat treatment is set up as a route operation with a resource of type 'Vendor' and a subcontracting purchase agreement. The production order has been released and started, but the vendor reports that they have not received the purchase order for the heat treatment service. The production planner checks the purchase order and finds that it has not been created yet. The planner confirms that the purchase agreement is active and covers the required service. What is the most likely reason that the purchase order was not automatically generated?

A.The purchase agreement has expired or is not approved.
B.The operation for heat treatment has not been scheduled on the production route.
C.The production order status is 'Estimated' and needs to be released first.
D.The vendor resource is not set up correctly in the system.
AnswerB

The system generates the purchase order only after the operation is scheduled; unscheduled operations do not trigger purchase order creation.

Why this answer

In Dynamics 365 Supply Chain Management, a subcontracting purchase order is automatically generated only after the corresponding route operation has been scheduled on the production route. Without scheduling, the system does not know when the service is needed and therefore does not trigger the purchase order creation, even if the purchase agreement is active and the production order has been released.

Exam trap

The trap here is that candidates often assume a released production order automatically generates all subcontracting purchase orders, but the system requires the route operation to be scheduled first to trigger the purchase order creation.

How to eliminate wrong answers

Option A is wrong because the question explicitly states that the purchase agreement is active and covers the required service, so expiration or approval status is not the issue. Option C is wrong because the production order has already been released and started, meaning its status is beyond 'Estimated' (which is the initial status before release). Option D is wrong because the vendor resource is set up correctly as a 'Vendor' type resource and the purchase agreement exists; the problem is the lack of scheduling, not the resource setup.

Full explanation →
499
MCQmedium

You are a supply chain analyst for a company that uses Dynamics 365 Supply Chain Management. The company procures steel coils from multiple suppliers. The procurement manager wants to evaluate supplier performance based on on-time delivery and price variance. They need a dashboard that shows a scorecard for each supplier, summarizing the percentage of deliveries received on or before the promised date, and the average price deviation from the purchase order price. Which tool should you use to create this dashboard without custom development?

A.Procurement and sourcing module
B.Vendor collaboration
C.Power BI
D.Excel integration
AnswerC

Power BI can create interactive dashboards from Dynamics 365 data.

Why this answer

Option D is correct because Power BI can connect to Dynamics 365 data and create visual dashboards for supplier scorecards. Option A is wrong because Procurement and sourcing module provides purchase order management but not a configurable scorecard dashboard. Option B is wrong because Vendor collaboration is for communication with vendors, not analytics.

Option C is wrong because Excel is not a dashboard tool for real-time scorecards without manual effort.

Full explanation →
500
Drag & Dropmedium

Drag and drop the steps to run a financial period close in Dynamics 365 Finance in the correct order.

Drag steps to the numbered slots on the right, or tap a step then tap a slot.

Steps
Order

Why this order

Period close involves selecting the period, inventory close, settlement, and posting closing entries.

Full explanation →
501
MCQhard

A distribution company uses Dynamics 365 Supply Chain Management. They notice that transportation costs are high across multiple carriers. Which module should they configure to optimize carrier selection and route planning?

A.Master Planning
B.Warehouse Management
C.Transportation Management
D.Asset Management
AnswerC

TMS optimizes carrier selection and route planning.

Why this answer

Option C is correct because Transportation Management (TMS) provides tools for carrier rate shopping, route planning, and freight optimization. Option A is wrong because Warehouse Management (WMS) focuses on inbound/outbound operations, not transportation. Option B is wrong because Master Planning handles supply/demand balancing, not carrier selection.

Option D is wrong because Asset Management is for equipment maintenance.

Full explanation →
502
MCQmedium

A consulting firm uses Dynamics 365 Project Operations to manage fixed-price projects. During project execution, the project manager notices that the actual cost is exceeding the budget. What should the project manager do to track and communicate the impact on profit?

A.Analyze resource utilization percentages to identify over-allocated resources.
B.Review the Cost Performance Index (CPI) on the project and update the estimate at completion (EAC).
C.Review the Schedule Performance Index (SPI) to assess if the project is behind schedule.
D.Compare the project budget to the actual cost in the project invoice.
AnswerB

CPI is the correct metric to monitor cost efficiency and forecast final costs.

Why this answer

In Dynamics 365 Project Operations, the Cost Performance Index (CPI) is the key metric for measuring cost efficiency on a project. When actual costs exceed the budget, the project manager should review the CPI and update the Estimate at Completion (EAC) to forecast the total expected cost based on current performance, directly communicating the impact on profit.

Exam trap

The trap here is that candidates confuse cost performance metrics (CPI) with schedule metrics (SPI) or operational metrics (resource utilization), leading them to select options that address resource allocation or schedule delays instead of the direct cost-to-profit impact.

How to eliminate wrong answers

Option A is wrong because analyzing resource utilization percentages identifies over-allocated resources but does not directly track or communicate the financial impact on profit; it focuses on capacity, not cost variance. Option C is wrong because the Schedule Performance Index (SPI) measures schedule efficiency, not cost performance, so it does not address the issue of actual cost exceeding budget. Option D is wrong because comparing the project budget to actual cost in the project invoice is a retrospective billing activity, not a real-time tracking or forecasting method for profit impact during execution.

Full explanation →
503
MCQeasy

Refer to the exhibit. A sales representative tries to confirm a sales order for 50 units of item L-5000, but the system does not allow confirmation because the available quantity is only 40. The reservation method is set to Manual. What should the sales representative do to proceed with the order?

A.Create a purchase order for 10 units
B.Change the reservation method to Automatic
C.Reduce the order quantity to 40 units
D.Manually reserve 40 units and backorder the remaining 10
AnswerD

Manual reservation allows partial reservation and backordering the rest.

Why this answer

Option D is correct because the reservation method is set to Manual, meaning the system does not automatically allocate inventory. The sales representative must manually reserve the available 40 units and backorder the remaining 10 units to proceed with the order, which aligns with the manual reservation process in Dynamics 365 Supply Chain Management.

Exam trap

The trap here is that candidates often assume changing the reservation method to Automatic will fix the immediate issue, but the system requires manual reservation for the current order regardless of the method setting, and the correct action is to manually reserve available stock and backorder the rest.

How to eliminate wrong answers

Option A is wrong because creating a purchase order for 10 units does not directly resolve the reservation issue; the sales order still lacks a manual reservation for the available 40 units and the backorder for the remaining 10. Option B is wrong because changing the reservation method to Automatic would alter the system's default behavior but does not address the immediate need to confirm the order with the current manual setting; the system would still require manual intervention for the existing order. Option C is wrong because reducing the order quantity to 40 units avoids the backorder but does not follow the correct procedure for handling a shortfall when the reservation method is Manual; the proper action is to reserve what is available and backorder the rest.

Full explanation →
504
Multi-Selecthard

Which THREE components are typically part of the general ledger setup in Dynamics 365 Finance? (Select THREE.)

Select 3 answers
A.Chart of accounts
B.Main accounts
C.Payment schedule
D.Customer payment journal
E.Financial dimensions
AnswersA, B, E

The chart of accounts is the list of main accounts and dimensions used for financial reporting.

Why this answer

Option A is correct because chart of accounts is the foundation. Option C is correct because financial dimensions are used for reporting. Option E is correct because main accounts are part of the chart of accounts.

Option B is wrong because it is a subledger. Option D is wrong because it is for payments.

Full explanation →
505
MCQmedium

A company uses Dynamics 365 Supply Chain Management and wants to automatically reorder stock when inventory falls below a defined level. Which functionality should be configured?

A.Cycle counting
B.Inventory aging
C.Reorder point
D.Safety stock
AnswerC

Reorder point automatically generates purchase orders when inventory falls below the reorder point.

Why this answer

Option B is correct because Reorder point functionality triggers purchase orders when stock falls below a set level. Option A is wrong because Safety stock is a minimum buffer but does not automatically create orders. Option C is wrong because Cycle counting is for inventory accuracy.

Option D is wrong because Inventory aging is for valuation, not replenishment.

Full explanation →
506
MCQmedium

Refer to the exhibit. A purchase order is received with a freight charge. The company wants the freight cost to be allocated to inventory value for landed cost calculations. Which configuration is required?

A.Set up the charge code 'FREIGHT' as a landing cost and allocate it to the purchase order line.
B.Use the 'Charges' code with debit type 'Item' to post to inventory.
C.Add the freight charge as a fixed cost to the vendor's invoice.
D.Create a new item for freight and include it in the purchase order.
AnswerA

Landing costs allocate charges to inventory value, increasing the cost of the item.

Why this answer

Option A is correct because in Dynamics 365 Supply Chain Management, to allocate a freight charge to inventory value for landed cost calculations, you must set up a charge code (e.g., 'FREIGHT') with the 'Landing cost' option enabled. This charge code is then assigned to the purchase order line, which automatically distributes the freight cost proportionally across the items, increasing their inventory value as part of the landed cost.

Exam trap

The trap here is that candidates often confuse the 'Charges' code with debit type 'Item' (Option B) as a valid method for landed cost, but it lacks the allocation logic and does not integrate with the Landed cost module, which is specifically designed for this purpose.

How to eliminate wrong answers

Option B is wrong because using a 'Charges' code with debit type 'Item' posts the charge directly to the inventory value without the landed cost allocation logic; it does not enable the automatic proportional distribution across purchase order lines that landed cost requires. Option C is wrong because adding the freight charge as a fixed cost to the vendor's invoice does not allocate it to inventory value; it simply records an additional cost on the invoice without affecting the inventory valuation of the received items. Option D is wrong because creating a new item for freight and including it in the purchase order treats freight as a separate inventory item, which does not allocate the cost to the original items' landed cost and may distort inventory valuation and reporting.

Full explanation →
507
MCQhard

A company using Dynamics 365 Supply Chain Management wants to implement vendor collaboration so that suppliers can view purchase orders and confirm delivery dates. Which feature should be set up?

A.Vendor collaboration
B.Inventory management
C.Procurement and sourcing
D.Accounts payable
AnswerA

Vendor collaboration provides a portal for suppliers to view and confirm purchase orders.

Why this answer

Option D is correct because Vendor collaboration (or Vendor portal) allows suppliers to access purchase orders and confirm dates. Option A is wrong because Procurement and sourcing manages internal procurement processes. Option B is wrong because Inventory management is for internal stock.

Option C is wrong because Accounts payable handles invoicing, not order confirmation.

Full explanation →
508
MCQhard

A company uses Dynamics 365 Supply Chain Management. They want to enable a vendor to manage their own inventory at the customer's site (consignment inventory). What process should they set up?

A.Vendor collaboration
B.Purchase order with drop shipment
C.Consignment inventory
D.Transfer order
AnswerC

Consignment inventory allows vendor-owned stock at customer site.

Why this answer

Consignment inventory in Dynamics 365 Supply Chain Management allows a vendor to own stock that is physically located at the customer's site. The customer only pays for the inventory when it is consumed or transferred to their ownership. Setting up the consignment inventory process enables the vendor to manage replenishment and visibility of their stock at the customer location through vendor collaboration features.

Exam trap

The trap here is that candidates often confuse 'vendor collaboration' (a communication feature) with the actual consignment inventory process, or they mistakenly think a drop shipment or transfer order can achieve the same vendor-managed inventory at the customer site.

How to eliminate wrong answers

Option A is wrong because vendor collaboration is a feature that allows vendors to interact with purchase orders and invoices, but it does not by itself enable the vendor to manage their own inventory at the customer site; it is a supporting tool, not the process for consignment. Option B is wrong because a purchase order with drop shipment directs goods from the vendor directly to the customer, but the vendor does not retain ownership of inventory at the customer site; ownership transfers upon shipment. Option D is wrong because a transfer order moves inventory between warehouses or locations within the same company, not between a vendor and a customer, and does not support vendor-owned stock at a customer site.

Full explanation →
509
MCQeasy

The exhibit shows the cost breakdown for finished good FG-200. The cost of RM-300 is 20.00 per unit, and RM-400 is 50.00 per unit. What is the total calculated cost of FG-200 based on this BOM?

A.120.00
B.100.00
C.90.00
D.150.00
AnswerC

The BOM calculation sums component costs: 2*20 + 1*50 = 90.

Why this answer

The bill of materials (BOM) for FG-200 lists RM-300 (2 units at 20.00 each = 40.00) and RM-400 (1 unit at 50.00 = 50.00). The total calculated cost is 40.00 + 50.00 = 90.00, making option C correct. In Dynamics 365 Supply Chain Management, the BOM calculation rolls up costs from raw materials to the finished good based on the BOM structure and cost prices.

Exam trap

The trap here is that candidates often misread the BOM quantities or incorrectly sum the costs (e.g., adding 20 + 50 = 70 and then multiplying by 2, or forgetting to multiply RM-300 by its quantity of 2), leading to wrong totals like 100.00 or 120.00.

How to eliminate wrong answers

Option A (120.00) is wrong because it incorrectly assumes 3 units of RM-300 (3 × 20 = 60) plus 1 unit of RM-400 (50) totals 110, or misapplies a different quantity; 120.00 does not match any valid combination from the given BOM. Option B (100.00) is wrong because it might result from using 2 units of RM-300 (40) plus 1 unit of RM-400 (50) but then adding an extra 10.00 erroneously, or from a miscalculation like 2 × 20 + 1 × 50 = 90, not 100. Option D (150.00) is wrong because it could come from multiplying both costs by 2 (2 × 20 + 2 × 50 = 140) or using 3 units of RM-400 (3 × 50 = 150), neither of which matches the BOM quantities.

Full explanation →
510
MCQmedium

Refer to the exhibit. A Dynamics 365 Finance and Operations administrator reviews a batch job configuration. The job is scheduled to run daily. What is the purpose of this batch job?

A.Generate recurring invoices
B.Post recurring invoices automatically
C.Send invoice payment reminders
D.Print recurring invoices
AnswerB

The batch job posts invoices daily as shown by the task parameters.

Why this answer

The batch job configuration shown is for the 'Recurring invoices' process in Dynamics 365 Finance and Operations. When a batch job is set to run daily with the action 'Post,' its purpose is to automatically post recurring invoices that have been previously set up in the recurring invoice template. This automates the posting step, eliminating the need for manual intervention each period.

Exam trap

The trap here is that candidates confuse the 'Post' action with 'Generate' or 'Print,' assuming the batch job creates invoices rather than posts them, but the exhibit explicitly shows the action is set to 'Post,' which is the final step in the recurring invoice lifecycle.

How to eliminate wrong answers

Option A is wrong because 'Generate recurring invoices' refers to the creation of invoice lines from a template, which is typically a separate batch job or manual process, not the posting action. Option C is wrong because 'Send invoice payment reminders' is a different process related to collections and customer communications, not the recurring invoice posting job. Option D is wrong because 'Print recurring invoices' is an output action that can be configured separately, but the batch job in the exhibit is specifically set to 'Post,' not to print.

Full explanation →
511
MCQmedium

A manufacturing company uses Dynamics 365 Finance and wants to automate the recognition of revenue for long-term contracts. Which module should they configure?

A.Project management and accounting
B.Revenue recognition
C.Accounts receivable
D.General ledger
AnswerB

Dedicated module for automating revenue recognition.

Why this answer

Option B is correct. The Revenue recognition module in Dynamics 365 Finance is specifically designed for automating revenue recognition under standards like ASC 606 and IFRS 15. Option A is incorrect because Project management and accounting handles project-based costing but not revenue recognition by default.

Option C is incorrect because Accounts receivable manages invoices and payments. Option D is incorrect because General ledger is the core accounting but lacks specialized revenue recognition features.

Full explanation →
512
MCQmedium

A logistics company uses Dynamics 365 Supply Chain Management to manage transportation. They need to calculate freight charges automatically based on carrier rates and shipment details. Which module should they use?

A.Warehouse management
B.Inventory management
C.Transportation management
D.Procurement and sourcing
AnswerC

Transportation management provides rate engines and masters for freight calculation.

Why this answer

Option B is correct because Transportation management includes rate engines and rate masters for automatic freight calculation. Option A is wrong because Warehouse management is for inbound/outbound operations. Option C is wrong because Procurement and sourcing is for purchasing.

Option D is wrong because Inventory management handles stock, not transportation.

Full explanation →
513
MCQhard

A distribution company uses Dynamics 365 Supply Chain Management. They want to use AI to predict customer demand and automatically suggest purchase orders. Which feature should they enable?

A.Warehouse management module
B.Planning Optimization add-in
C.Inventory Visibility add-in
D.Demand Forecasting feature
AnswerD

Demand Forecasting uses AI to predict demand and can generate suggested purchase orders.

Why this answer

Option B is correct because the Demand Forecasting feature uses machine learning to predict demand and can be used for replenishment suggestions. Option A is wrong because the Planning Optimization add-in improves master planning performance but doesn't provide AI-based demand prediction. Option C is wrong because the Warehouse management module manages warehouse operations.

Option D is wrong because the Inventory visibility add-in provides near real-time inventory visibility, not demand prediction.

Full explanation →
514
MCQmedium

A company uses Dynamics 365 Supply Chain Management to manage its supply chain. The procurement manager notices that purchase requisitions are not being converted to purchase orders automatically as expected. The workflow for purchase requisitions is set to auto-approve for amounts under $1,000. Upon investigation, the manager finds that a requisition for $950 is stuck in 'Draft' status. What is the most likely cause?

A.The workflow requires budget approval for all requisitions.
B.The purchase requisition was rejected by the workflow.
C.The dollar limit for auto-approval is set to $900.
D.The purchase requisition has not been submitted for review.
AnswerD

A purchase requisition must be submitted to trigger the workflow. Draft status means it hasn't been submitted.

Why this answer

Option D is correct because in Dynamics 365 Supply Chain Management, a purchase requisition must be explicitly submitted to trigger the workflow. Even if the workflow is configured for auto-approval, the requisition remains in 'Draft' status until the user clicks 'Submit'. The $950 requisition was never submitted, so the auto-approval process never started.

Exam trap

The trap here is that candidates assume auto-approval means the system automatically processes the requisition from Draft to Approved without requiring manual submission, but in Dynamics 365, submission is a mandatory user action to start any workflow, including auto-approval.

How to eliminate wrong answers

Option A is wrong because budget approval is a separate workflow step that would only apply after submission; it does not prevent submission or keep a requisition in 'Draft'. Option B is wrong because a rejected requisition would show a 'Rejected' status, not 'Draft'. Option C is wrong because the auto-approval limit is $1,000, and $950 is under that threshold; if the limit were $900, the requisition would still need to be submitted first before the workflow could evaluate it.

Full explanation →
515
MCQmedium

A manufacturing company uses Dynamics 365 Finance. They need to automate the process of reordering raw materials when inventory falls below a predefined level. Which feature should they configure?

A.Safety stock levels
B.ABC classification
C.Batch attributes
D.Inventory aging reports
AnswerA

Safety stock levels trigger replenishment when inventory falls below a predefined level.

Why this answer

Option B is correct because Safety stock levels trigger replenishment when inventory drops below the set threshold. Option A is wrong because ABC classification is used for inventory categorization, not automated reordering. Option C is wrong because Inventory aging reports analyze stock age, not trigger reorders.

Option D is wrong because Batch attributes are for quality control, not replenishment.

Full explanation →
516
MCQeasy

A company uses Dynamics 365 Human Resources to manage employee information. They need to ensure that only authorized HR staff can view sensitive personal data. Which feature should they configure?

A.Employee self-service
B.Audit logging
C.Role-based security
D.Workflow automation
AnswerC

Role-based security restricts data access based on user roles, ensuring only authorized HR staff can view sensitive data.

Why this answer

Role-based security (option C) is the correct feature because Dynamics 365 Human Resources uses role-based security to control access to sensitive personal data. By assigning HR staff to specific security roles (e.g., HR Manager, HR Assistant), administrators can grant or deny permissions to view, edit, or delete sensitive fields like Social Security numbers or bank account details. This ensures that only authorized users with the appropriate role can access protected data, aligning with data privacy requirements.

Exam trap

The trap here is that candidates often confuse audit logging (a detective control) with a preventive security measure, but audit logging only records events after they occur and does not block unauthorized access.

How to eliminate wrong answers

Option A is wrong because Employee self-service allows employees to view and update their own information (e.g., address, emergency contacts), but it does not restrict access for HR staff; it is a user-facing portal, not a security control. Option B is wrong because Audit logging tracks who accessed or modified data (e.g., for compliance), but it does not prevent unauthorized access; it is a detective control, not a preventive one. Option D is wrong because Workflow automation routes business processes (e.g., approval requests) but does not enforce data access permissions; it focuses on process orchestration, not security.

Full explanation →
517
MCQeasy

A company wants to track inventory in multiple warehouses using serial numbers. In Dynamics 365 Supply Chain Management, what must be configured on the item to enable mandatory serial number tracking?

A.Set the tracking dimension group to include serial numbers and mark them as 'Active' and 'Mandatory'.
B.Set the inventory model group to include serial numbers.
C.Set the storage dimension group to include serial numbers.
D.Set the coverage group to include serial numbers.
AnswerA

Tracking dimension groups enable serial and batch tracking.

Why this answer

Option A is correct because the tracking dimension group defines which dimensions (like serial number) are active and mandatory. Option B is wrong because storage dimension group controls site, warehouse, etc., not serial numbers. Option C is wrong because inventory model group controls costing and inventory policies.

Option D is wrong because coverage group controls replenishment.

Full explanation →
518
MCQmedium

A company implements Dynamics 365 Finance and Operations. They want to ensure that only authorized users can access the system from external networks. What should they configure?

A.Mobile device management in Microsoft Intune
B.Conditional Access policies in Microsoft Entra ID
C.Role-based security in Finance and Operations
D.Data loss prevention policies in Microsoft Purview
AnswerB

Conditional Access controls access based on conditions like network location.

Why this answer

Conditional Access policies in Microsoft Entra ID (formerly Azure AD) allow administrators to enforce access controls based on conditions such as user location, device compliance, and network context. For external network access, you can configure policies to require multi-factor authentication or block access from untrusted IP ranges, ensuring only authorized users can connect to Dynamics 365 Finance and Operations from outside the corporate network.

Exam trap

The trap here is that candidates often confuse internal application-level security (role-based security) with network-level authentication controls (Conditional Access), leading them to select role-based security as the answer for external access restrictions.

How to eliminate wrong answers

Option A is wrong because Mobile device management in Microsoft Intune focuses on managing and securing mobile devices (e.g., enforcing encryption, remote wipe) but does not directly control network-level access to Finance and Operations from external networks. Option C is wrong because Role-based security in Finance and Operations controls what users can do within the application (e.g., view financial data, approve purchase orders) but does not manage authentication or network access from external sources. Option D is wrong because Data loss prevention policies in Microsoft Purview are designed to prevent sensitive data from being shared or leaked (e.g., via email or SharePoint) and do not restrict who can sign in to the system from external networks.

Full explanation →
519
MCQeasy

A manufacturing company uses Dynamics 365 Supply Chain Management to manage its production. The production manager notices that the planned production orders are not generating the expected material requirements. What should the administrator check first?

A.Verify that the route is correctly defined for the item.
B.Check if the item's inventory status is set to 'Open'.
C.Ensure the bill of materials (BOM) is approved and active.
D.Review the capacity constraints on the work center.
AnswerC

An active BOM is required for material requirement generation.

Why this answer

The bill of materials (BOM) defines the components required for production. If the BOM is missing or incorrect, material requirements will not be generated. The route is for operations sequencing, not material requirements.

Inventory status and capacity constraints affect execution, not planning explosion.

Full explanation →
520
MCQeasy

A company wants to use Dynamics 365 Supply Chain Management to manage quality inspections for incoming raw materials. Which module should they configure?

A.Production control
B.Warehouse management
C.Quality management
D.Inventory management
AnswerC

Quality management provides inspection and nonconformance tools.

Why this answer

Quality management handles quality orders, inspections, and nonconformance. Inventory management tracks stock. Warehouse management handles storage.

Production control handles manufacturing.

Full explanation →
521
MCQhard

A multinational corporation uses Dynamics 365 Finance with multiple legal entities. The company needs to streamline the intercompany reconciliation process. They want to automatically generate balancing journal entries when transactions are posted between entities. Which configuration should be used to meet this requirement?

A.Define intercompany transaction pairs
B.Use intercompany journal posting
C.Configure intercompany accounting setup
D.Set up consolidation groups
AnswerC

Intercompany accounting setup automates the creation of balancing journal entries between legal entities.

Why this answer

Intercompany accounting setup allows automated balancing entries. Consolidation is for combining financial statements, not automatic balancing. Intercompany journal posting is a manual process.

Intercompany transaction pairs are used for matching transactions but do not automatically generate balancing entries. Option A is correct.

Full explanation →
522
Multi-Selecteasy

Which TWO of the following are prerequisites for setting up consolidation in Dynamics 365 Finance?

Select 2 answers
A.All entities must use the same fiscal calendar.
B.Intercompany transactions must be configured.
C.Multiple legal entities must be set up.
D.The chart of accounts must be consistent across entities.
E.Workflow must be enabled for consolidation journals.
AnswersC, D

Consolidation requires multiple legal entities.

Why this answer

Options A and B are correct. Multiple legal entities must exist, and chart of accounts must be consistent. Option C is wrong because intercompany transactions are not required.

Option D is wrong because different fiscal calendars are not a prerequisite. Option E is wrong because workflow is optional.

Full explanation →
523
MCQmedium

Refer to the exhibit. A finance manager reviews the budget control configuration in Dynamics 365 Finance. The OverBudgetOption is set to 'WarnOnly'. What will happen when a user attempts to post an expense that exceeds the remaining budget?

A.The expense will be posted without any warning.
B.The user will receive a warning but can still post the expense.
C.The expense will be blocked and cannot be posted.
D.The budget control will be ignored because OverBudgetOption is set.
AnswerB

WarnOnly displays a warning but allows posting to proceed.

Why this answer

The OverBudgetOption 'WarnOnly' allows posting with a warning. 'Block' prevents posting. 'None' disables control. The configuration shows BudgetControlEnabled=true, so control is active.

Full explanation →
524
MCQhard

A company configured the warehouse management parameters as shown in the exhibit. What is the purpose of this configuration?

A.To adjust the minimum and maximum replenishment quantities during picking
B.To automatically replenish picking locations when the quantity falls below the minimum of 10 units
C.To disable location directives and use wave-based processing
D.To manually trigger replenishment when inventory drops below 10 units
AnswerB

The wave step type 'Replenishment' with min/max triggers automatic replenishment when stock falls below 10.

Why this answer

Option C is correct because the configuration defines a wave step for replenishment with min/max quantities, meaning automatic replenishment is triggered during wave processing. Option A is wrong because it's not about manual replenishment. Option B is wrong because location directives are used, but the wave step is specifically for replenishment.

Option D is wrong because it's not about adjusting min/max during picking; it's about automatic replenishment.

Full explanation →
525
Multi-Selectmedium

Which THREE modules are part of Dynamics 365 Supply Chain Management?

Select 3 answers
A.Procurement and sourcing
B.Master planning
C.Project management and accounting
D.Human resources
E.Sales and marketing
AnswersA, B, E

Procurement and sourcing is a core module in Supply Chain Management.

Why this answer

Options B, C, and D are correct. Master planning, Procurement and sourcing, and Sales and marketing are core modules. Option A is wrong because Human resources is part of Dynamics 365 Human Resources, not Supply Chain Management.

Option E is wrong because Project management and accounting is part of Dynamics 365 Project Operations, not Supply Chain Management.

Full explanation →
Page 6

Page 7 of 13

Page 8

All pages

12345678910111213

Practice MB-920 by domain

Target a specific domain to shore up weak areas.

Describe Dynamics 365 Supply Chain ManagementDescribe Dynamics 365 FinanceDescribe the core capabilities of the finance and operations appsDescribe shared features and Copilot capabilitiesDescribe Dynamics 365 Human ResourcesDescribe Dynamics 365 CommerceDescribe Dynamics 365 Project OperationsDescribe shared Dynamics 365 ERP features
See all domains with question counts →