MB-920 Describe Dynamics 365 Finance Practice Question
Exhibit
Refer to the exhibit.
{
"FixedAssetGroup": "VEHICLES",
"DepreciationProfile": "200% Declining Balance",
"ServiceLife": 5,
"AcquisitionCost": 50000.00,
"PlacedInServiceDate": "2025-01-01"
}Refer to the exhibit. A fixed asset is configured as shown. What is the depreciation amount for the first year (2025) if the company uses a half-year convention?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
10000.00
The asset cost is $50,000 with a 5-year useful life and 200% declining balance method with half-year convention. Straight-line rate = 1/5 = 20%. Double-declining rate = 2 × 20% = 40%. First-year depreciation with half-year convention: $50,000 × 40% × 0.5 = $10,000. Option A ($20,000) ignores the half-year convention. Option C ($12,000) is not a valid calculation. Option D ($10,000 straight-line) is incorrect because the method used is declining balance, not straight-line.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
20000.00
Why it's wrong here
Incorrect. This amount ($20,000) results from ignoring the half-year convention and applying full year double declining balance.
- ✓
10000.00
Why this is correct
Correct. This is the depreciation amount using double declining balance with half-year convention: $50,000 × 40% × 0.5 = $10,000.
- ✗
12000.00
Why it's wrong here
Incorrect. $12,000 is not a standard result for this method. It may arise from a miscalculation.
- ✗
10000.00 (straight-line)
Why it's wrong here
Incorrect. This option uses straight-line method ($10,000 = $50,000/5), but the asset is configured for double declining balance.
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