The correct answer is to set up project budgets with budget control, and use project forecasts to predict future costs and revenue. This configuration directly addresses the need for real-time tracking of actual costs against budget while enforcing cost limits through budget control, which prevents overspending by checking expenses against the approved budget before they post. Project forecasts then allow managers to predict future costs and revenue, enabling proactive financial planning. On the MB-920 exam, this scenario tests your understanding of the distinct roles of budget control versus forecasting within Dynamics 365 Finance project accounting, often appearing as a trap where candidates confuse task management tools like work breakdown structures with financial controls. A common memory tip is to remember that budget control is a "guardrail" for spending, while forecasting is a "crystal ball" for future numbers.
MB-920 Describe Dynamics 365 Finance Practice Question
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.
You are the finance controller at Contoso Ltd., a service company that uses Dynamics 365 Finance for project accounting. The company has multiple ongoing projects, each with a budget. The project managers need to track actual costs against budget in real time. They also need to be able to forecast future costs and revenue for each project. The CFO wants to use the Project budget feature to control costs. You need to configure the system to meet these requirements. What should you do?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Set up project budgets with budget control, and use project forecasts to predict future costs and revenue.
Option C is correct because project budgets allow tracking actual vs budget, and budget control ensures costs do not exceed budget. Forecasting can be done using project forecasts. Option A is wrong because fixed-price projects do not allow flexible forecasting. Option B is wrong because expense journals are not for budget tracking. Option D is wrong because work breakdown structures are for task management, not budget control.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Create project budgets using the project budget control feature, and use expense journals to post costs.
Why it's wrong here
Incorrect: Expense journals are for posting, not for budget tracking.
✗
Set up each project as a fixed-price project and use the project budget control feature to track costs.
Why it's wrong here
Incorrect: Fixed-price projects do not support flexible forecasting.
✓
Set up project budgets with budget control, and use project forecasts to predict future costs and revenue.
Why this is correct
Correct: This allows real-time tracking and forecasting.
Related concept
Read the scenario before looking for a memorised answer.
✗
Create a work breakdown structure for each project and use the project budget control feature to monitor costs.
Why it's wrong here
Incorrect: WBS is for scheduling, not budget tracking.
Common exam traps
Common exam trap: answer the scenario, not the keyword
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
How to think about this question
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.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
Use explanations to understand the rule behind the answer.
TExam Day Tips
→Underline the problem statement mentally.
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
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.
What to study next
Got this wrong? Here's your next step.
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 — This question tests Describe Dynamics 365 Finance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Set up project budgets with budget control, and use project forecasts to predict future costs and revenue. — Option C is correct because project budgets allow tracking actual vs budget, and budget control ensures costs do not exceed budget. Forecasting can be done using project forecasts. Option A is wrong because fixed-price projects do not allow flexible forecasting. Option B is wrong because expense journals are not for budget tracking. Option D is wrong because work breakdown structures are for task management, not budget control.
What should I do if I get this MB-920 question wrong?
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.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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