Quick Answer
The answer is the payment terms configuration. This is correct because cash discounts in Dynamics 365 Finance are defined at the vendor payment terms level, where you set a discount percentage and a due date window; when a vendor invoice is entered, the system automatically calculates the discount based on these terms, applying it to the invoice line or total. On the MB-920 exam, this tests your understanding of the accounts payable process flow, specifically how financial logic is decoupled from master data—a common trap is confusing vendor master settings (which store company details like address and tax ID) with transactional rules like discounts. To remember, think of payment terms as the “rulebook” for cash discounts: they live with the terms, not the vendor or the invoice policy. A useful mnemonic is “Terms for Terms”—payment terms hold the discount terms.
This MB-920 practice question tests your understanding of describe dynamics 365 finance. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company uses Dynamics 365 Finance. The accounts payable team needs to automatically calculate discounts based on payment terms when entering vendor invoices. Where should they configure the discount?
Payment terms
Payment terms configure cash discounts that are automatically applied during invoice entry.
Procurement categories
Why wrong: Procurement categories classify items, not discounts.
Invoice policies
Why wrong: Invoice policies are for approval processes, not discounts.
Vendor master
Why wrong: Vendor master stores company details, not payment terms.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Payment terms
Option C is correct because cash discounts are configured at the vendor payment terms level and automatically applied during invoice entry. Option A is wrong because invoice policies are for approval, not discounts. Option B is wrong because vendor master only stores company details. Option D is wrong because procurement categories are for item classification.
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.
Payment terms
Why this is correct
Payment terms configure cash discounts that are automatically applied during invoice entry.
Related concept
Read the scenario before looking for a memorised answer.
Procurement categories
Why it's wrong here
Procurement categories classify items, not discounts.
Invoice policies
Why it's wrong here
Invoice policies are for approval processes, not discounts.
Vendor master
Why it's wrong here
Vendor master stores company details, not payment terms.
Common exam traps
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Detailed technical explanation
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
What to study next
Identify which MB-920 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Describe Dynamics 365 Finance — study guide chapter
Learn the concepts, then practise the questions
Describe Dynamics 365 Finance practice questions
Targeted practice on this topic area only
All MB-920 questions
966 questions across all exam domains
Microsoft Dynamics 365 Fundamentals ERP MB-920 study guide
Full concept coverage aligned to exam objectives
MB-920 practice test guide
How to use practice tests most effectively before exam day
Related practice questions
Use these pages to review the topic behind this question. This is how one missed question becomes focused revision.
Practise MB-920 questions linked to Describe Dynamics 365 Supply Chain Management.
Practise MB-920 questions linked to Describe Dynamics 365 Finance.
Practise MB-920 questions linked to Describe the core capabilities of the finance and operations apps.
Practise MB-920 questions linked to Describe shared features and Copilot capabilities.
Practise MB-920 questions linked to Describe Dynamics 365 Human Resources.
Practise MB-920 questions linked to Describe Dynamics 365 Commerce.
Practise MB-920 questions linked to Describe Dynamics 365 Project Operations.
Practise MB-920 questions linked to Describe shared Dynamics 365 ERP features.
Practise MB-920 questions linked to MB-920 fundamentals.
Practise MB-920 questions linked to MB-920 scenario.
Practise MB-920 questions linked to MB-920 troubleshooting.
Practice this exam
Short sessions build daily habit. Longer sessions build exam-day stamina. Try a timed session to simulate real conditions.
FAQ
Describe Dynamics 365 Finance — This question tests Describe Dynamics 365 Finance — Read the scenario before looking for a memorised answer..
The correct answer is: Payment terms — Option C is correct because cash discounts are configured at the vendor payment terms level and automatically applied during invoice entry. Option A is wrong because invoice policies are for approval, not discounts. Option B is wrong because vendor master only stores company details. Option D is wrong because procurement categories are for item classification.
Identify which MB-920 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Last reviewed: Jun 21, 2026
This MB-920 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MB-920 exam.
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.