- A
Create one fixed asset record for the total cost and manually adjust depreciation
Why wrong: The system would depreciate the entire cost, which is incorrect for land.
- B
Create two fixed asset records: one for land with non-depreciable profile, and one for building with depreciable profile
This allows correct depreciation treatment: land is not depreciated, building is depreciated over its useful life.
- C
Use the 'Component Depreciation' feature to split the asset
Why wrong: Component depreciation is used for assets with components that have different useful lives, but land is not depreciable.
- D
Create a parent asset for the building and a sub-asset for the land
Why wrong: Sub-assets inherit depreciation settings from the parent; land would still be depreciated.
Quick Answer
The correct answer is to create two fixed asset records: one for land with a non-depreciable profile, and one for the building with a depreciable profile. This is because Dynamics 365 Finance requires each fixed asset record to have a single depreciation profile, and land is inherently non-depreciable while the building structure loses value over time. On the MB-920 exam, this scenario tests your understanding of fixed asset setup and the principle that cost allocation must be manual and explicit—the system will not automatically split a combined purchase. A common trap is assuming a single record can hold both a depreciable and non-depreciable portion, but the platform enforces one profile per asset. Remember the memory tip: “Land lasts, building busts—two records, two profiles.”
MB-920 Describe Dynamics 365 Finance Practice Question
This MB-920 practice question tests your understanding of describe dynamics 365 finance. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. 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 service company uses Dynamics 365 Finance to manage fixed assets. They recently acquired a building and want to split the cost between land (non-depreciable) and building (depreciable). How should they set this up?
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
Create two fixed asset records: one for land with non-depreciable profile, and one for building with depreciable profile
Option A is correct because Dynamics 365 Finance allows creating separate fixed asset records for land and building, each with different depreciation profiles. Option B is wrong because a single record cannot have a non-depreciable portion. Option C is wrong because the system does not automatically split cost. Option D is wrong because a sub-asset would still be depreciable, not non-depreciable.
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 one fixed asset record for the total cost and manually adjust depreciation
Why it's wrong here
The system would depreciate the entire cost, which is incorrect for land.
- ✓
Create two fixed asset records: one for land with non-depreciable profile, and one for building with depreciable profile
Why this is correct
This allows correct depreciation treatment: land is not depreciated, building is depreciated over its useful life.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Use the 'Component Depreciation' feature to split the asset
Why it's wrong here
Component depreciation is used for assets with components that have different useful lives, but land is not depreciable.
- ✗
Create a parent asset for the building and a sub-asset for the land
Why it's wrong here
Sub-assets inherit depreciation settings from the parent; land would still be depreciated.
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.
- →
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FAQ
Questions learners often ask
What does this MB-920 question test?
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: Create two fixed asset records: one for land with non-depreciable profile, and one for building with depreciable profile — Option A is correct because Dynamics 365 Finance allows creating separate fixed asset records for land and building, each with different depreciation profiles. Option B is wrong because a single record cannot have a non-depreciable portion. Option C is wrong because the system does not automatically split cost. Option D is wrong because a sub-asset would still be depreciable, not non-depreciable.
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.
About these practice questions
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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.
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