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.
An organization uses Dynamics 365 Finance to manage fixed assets. Which THREE capabilities are part of the fixed assets module? (Choose three.)
Depreciation calculation
Depreciation is a fundamental fixed asset capability.
Lease accounting
Why wrong: Lease accounting is a separate module.
Asset transfer
Transfer of assets between locations or departments is a core feature.
Asset retirement obligations
Asset retirement obligations are managed in fixed assets.
Impairment testing
Why wrong: Impairment testing is an advanced feature, not a core capability.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Depreciation calculation
Option A is correct because the fixed assets module in Dynamics 365 Finance includes automated depreciation calculation using multiple methods (e.g., straight-line, declining balance, sum-of-years-digits). The system applies user-defined depreciation profiles and schedules to systematically allocate the asset's cost over its useful life, generating periodic journal entries without manual intervention.
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.
Depreciation calculation
Why this is correct
Depreciation is a fundamental fixed asset capability.
Related concept
Read the scenario before looking for a memorised answer.
Lease accounting
Why it's wrong here
Lease accounting is a separate module.
Asset transfer
Why this is correct
Transfer of assets between locations or departments is a core feature.
Related concept
Read the scenario before looking for a memorised answer.
Asset retirement obligations
Why this is correct
Asset retirement obligations are managed in fixed assets.
Related concept
Read the scenario before looking for a memorised answer.
Impairment testing
Why it's wrong here
Impairment testing is an advanced feature, not a core capability.
Common exam traps
The trap here is that candidates confuse lease accounting (a separate module) and impairment testing (an external process) with core fixed assets capabilities, because they are related asset lifecycle activities but not part of the fixed assets module itself.
Detailed technical explanation
The fixed assets module integrates with the General ledger to post depreciation automatically based on the depreciation profile, which includes settings for service life, depreciation periods, and conventions (e.g., half-year, full-month). Asset transfer functionality allows moving assets between legal entities, locations, or asset groups, updating financial dimensions and value models accordingly. Asset retirement obligations (ARO) are supported through specific asset types and liability tracking, aligning with accounting standards like ASC 410 for decommissioning costs.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
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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: Depreciation calculation — Option A is correct because the fixed assets module in Dynamics 365 Finance includes automated depreciation calculation using multiple methods (e.g., straight-line, declining balance, sum-of-years-digits). The system applies user-defined depreciation profiles and schedules to systematically allocate the asset's cost over its useful life, generating periodic journal entries without manual intervention.
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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