How should I use these Describe Dynamics 365 Finance practice questions?

Read each scenario carefully and choose your answer before revealing the explanation. Then check why your choice was right or wrong. Repeat until the reasoning feels automatic.

Can I practise just Describe Dynamics 365 Finance questions in a focused session?

Yes — use the session launcher on this page to start a 10-, 20-, 30- or 50-question session drawn entirely from the Describe Dynamics 365 Finance domain.

MB-920 · topic practice

Describe Dynamics 365 Finance practice questions

Practise Microsoft Dynamics 365 Fundamentals ERP MB-920 Describe Dynamics 365 Finance practice questions — original exam-style scenarios with answer choices, explanations, and analysis of common mistakes.

Courseiva uses original exam-style practice questions designed for learning and revision. The goal is to understand the concepts, recognise exam patterns, and improve through explanations — not memorise copied exam dumps.

Reviewed byJohnson Ajibi· MSc IT Security

20 questionsDomain: Describe Dynamics 365 Finance

Practice 10 questions Browse domain →

What the exam tests

What to know about Describe Dynamics 365 Finance

Describe Dynamics 365 Finance questions test whether you can apply the concept in context, not just recognise a definition.

How the topic appears in realistic exam-style scenarios.

Which detail in the question changes the correct answer.

How to eliminate plausible but wrong options.

How to connect the question back to the wider exam objective.

Watch out for

Common Describe Dynamics 365 Finance exam traps

▸Answering from memory before reading the full scenario.
▸Missing a constraint such as cost, availability, security, scope or command context.
▸Choosing a broad answer when the question asks for the most specific fix.
▸Ignoring why the wrong options are tempting.

Practice set

Describe Dynamics 365 Finance questions

20 questions · select your answer, then reveal the explanation

Question 1easymultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company is implementing Dynamics 365 Finance and needs to configure a chart of accounts that supports multiple legal entities with different fiscal requirements. Which structure should be used?

Trap 1: Use a single shared chart of accounts with one shared fiscal…

A single fiscal calendar cannot handle different fiscal years.

Trap 2: Use main accounts only without dimensions.

Dimensions are necessary for reporting and analysis.

Trap 3: Create a separate chart of accounts for each legal entity.

This increases maintenance and does not leverage shared functionality.

Study all Describe Dynamics 365 Finance common traps →

A
Use a shared chart of accounts with separate fiscal calendars per legal entity.
Allows consistent account structures while accommodating different fiscal requirements.
B
Use a single shared chart of accounts with one shared fiscal calendar.
Why wrong: A single fiscal calendar cannot handle different fiscal years.
C
Use main accounts only without dimensions.
Why wrong: Dimensions are necessary for reporting and analysis.
D
Create a separate chart of accounts for each legal entity.
Why wrong: This increases maintenance and does not leverage shared functionality.

Full breakdown with real-world context →

Question 2mediummultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company uses Dynamics 365 Finance and needs to create a vendor payment that includes a discount of $50 if paid within 10 days. The invoice is for $1,000. The payment is made on day 8. What should the payment amount be?

Trap 1: $1,000

Discount not applied.

Trap 2: $900

Incorrect discount amount.

Trap 3: $1,050

This adds the discount.

Study all Describe Dynamics 365 Finance common traps →

A
$1,000
Why wrong: Discount not applied.
B
$900
Why wrong: Incorrect discount amount.
C
$950
Invoice minus discount.
D
$1,050
Why wrong: This adds the discount.

Full breakdown with real-world context →

Question 3hardmultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company is implementing Dynamics 365 Finance and needs to automate the reconciliation of bank transactions. Which feature should be used to match bank statement lines with open bank document lines based on rules?

Trap 1: Bank account reconciliation

Manual process without rules.

Trap 2: Payment proposal

Used for generating payments.

Trap 3: Automatic settlement

Not a valid feature for bank reconciliation.

Study all Describe Dynamics 365 Finance common traps →

A
Bank account reconciliation
Why wrong: Manual process without rules.
B
Payment proposal
Why wrong: Used for generating payments.
C
Automatic settlement
Why wrong: Not a valid feature for bank reconciliation.
D
Advanced bank reconciliation
Uses matching rules to automate reconciliation.

Full breakdown with real-world context →

Question 4easymultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company needs to ensure that purchase orders cannot be created without an approved vendor. Which configuration should be used?

Trap 1: Create a purchase order approval workflow

Approves purchase orders, not vendor status.

Trap 2: Enable 'Invoice matching validation'

Affects invoice processing, not purchase orders.

Trap 3: Set vendor status to Active

Does not enforce approval requirement.

Study all Describe Dynamics 365 Finance common traps →

A
Create a purchase order approval workflow
Why wrong: Approves purchase orders, not vendor status.
B
Set 'Require approval for vendor' to Yes in Procurement and sourcing parameters
Prevents use of unapproved vendors in purchase orders.
C
Enable 'Invoice matching validation'
Why wrong: Affects invoice processing, not purchase orders.
D
Set vendor status to Active
Why wrong: Does not enforce approval requirement.

Full breakdown with real-world context →

Question 5mediummulti select

Read the full Describe Dynamics 365 Finance explanation →

A company uses Dynamics 365 Finance. The CFO wants to analyze actuals vs budget across multiple departments and cost centers. Which THREE components must be set up?

Trap 1: Budget control configuration

For controlling spending, not analysis.

Trap 2: Budget register entries

Used to enter budget amounts, not analysis.

Study all Describe Dynamics 365 Finance common traps →

A
Budget control configuration
Why wrong: For controlling spending, not analysis.
B
Budget model
Required to define budget amounts.
C
Financial dimensions
Enable analysis by department and cost center.
D
Budget cycle
Defines the time period for budgeting.
E
Budget register entries
Why wrong: Used to enter budget amounts, not analysis.

Full breakdown with real-world context →

Question 6hardmulti select

Read the full Describe Dynamics 365 Finance explanation →

A company is configuring fixed assets in Dynamics 365 Finance. They need to ensure that asset depreciation is calculated differently for tax reporting and financial reporting. Which TWO actions must be taken?

Trap 1: Use a single depreciation book for both tax and financial.

Cannot have different methods in one book.

Trap 2: Enable the 'Derived value models' feature.

Used for transferring asset values, not for different methods.

Trap 3: Use a single value model with multiple depreciation profiles.

A value model can only have one depreciation profile.

Study all Describe Dynamics 365 Finance common traps →

A
Use a single depreciation book for both tax and financial.
Why wrong: Cannot have different methods in one book.
B
Create multiple value models for the same asset.
Allows different depreciation methods for tax and financial.
C
Set up separate depreciation profiles for each value model.
Each value model uses its own depreciation profile.
D
Enable the 'Derived value models' feature.
Why wrong: Used for transferring asset values, not for different methods.
E
Use a single value model with multiple depreciation profiles.
Why wrong: A value model can only have one depreciation profile.

Full breakdown with real-world context →

Question 7hardmultiple choice

Read the full NAT/PAT explanation →

You are the Dynamics 365 Finance administrator for a manufacturing company with multiple legal entities. The company uses intercompany transactions between Entity A (US) and Entity B (Germany). Entity A sells raw materials to Entity B. The transactions must be recorded in both entities' ledgers, and the intracompany trade must be eliminated during consolidation. Recently, the accounting team reported that intercompany transactions are not being eliminated correctly. Upon investigation, you find that the intercompany transactions were posted using separate purchase orders and sales orders, not through the intercompany module. The elimination process uses intercompany eliminations rules. What should you do to ensure proper elimination?

Trap 1: Reverse the existing transactions and repost them with the same…

This repeats the same issue.

Trap 2: Create manual elimination journal entries to correct the balances.

Manual entries are not sustainable and may not match.

Trap 3: Adjust the elimination rules to match the existing transactions.

Elimination rules require matching entries from the intercompany module.

Study all Describe Dynamics 365 Finance common traps →

A
Recreate the transactions using the intercompany module and delete the original orders.
Ensures automatic matching and elimination.
B
Reverse the existing transactions and repost them with the same method.
Why wrong: This repeats the same issue.
C
Create manual elimination journal entries to correct the balances.
Why wrong: Manual entries are not sustainable and may not match.
D
Adjust the elimination rules to match the existing transactions.
Why wrong: Elimination rules require matching entries from the intercompany module.

Full breakdown with real-world context →

Question 8mediummultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A manufacturing company is implementing Dynamics 365 Finance and wants to streamline its procure-to-pay process. They need to automatically generate purchase orders when inventory falls below a predefined level. Which feature should they configure?

Trap 1: Use procurement catalogs with punch-out to vendor

Why D is wrong

Trap 2: Configure purchase requisition workflow with auto-release

Why C is wrong

Trap 3: Enable vendor collaboration for automatic ordering

Why B is wrong

Study all Describe Dynamics 365 Finance common traps →

A
Use procurement catalogs with punch-out to vendor
Why wrong: Why D is wrong
B
Configure purchase requisition workflow with auto-release
Why wrong: Why C is wrong
C
Set up reorder point planning and coverage groups
Why A is correct
D
Enable vendor collaboration for automatic ordering
Why wrong: Why B is wrong

Full breakdown with real-world context →

Question 9hardmultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company's finance team reports that in the general ledger, the balance for the 'Office Supplies' account shows a credit balance of $500, but they expected a debit balance. What is the most likely cause of this discrepancy?

Trap 1: The period close process was run without finalizing

Why B is wrong

Trap 2: A reversing entry was posted incorrectly

Why A is wrong

Trap 3: A financial dimension was incorrectly assigned

Why D is wrong

Study all Describe Dynamics 365 Finance common traps →

A
The period close process was run without finalizing
Why wrong: Why B is wrong
B
A voucher was posted with the wrong debit/credit sign
Why C is correct
C
A reversing entry was posted incorrectly
Why wrong: Why A is wrong
D
A financial dimension was incorrectly assigned
Why wrong: Why D is wrong

Full breakdown with real-world context →

Question 10easymultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company uses Dynamics 365 Finance and needs to ensure that all vendor invoices are approved by the department manager before payment. Which feature should they use?

Trap 1: Set up payment schedules

Why A is wrong

Trap 2: Enable invoice matching validation

Why D is wrong

Trap 3: Create purchase order approval workflows

Why C is wrong

Study all Describe Dynamics 365 Finance common traps →

A
Set up payment schedules
Why wrong: Why A is wrong
B
Enable invoice matching validation
Why wrong: Why D is wrong
C
Configure vendor invoice workflows
Why B is correct
D
Create purchase order approval workflows
Why wrong: Why C is wrong

Full breakdown with real-world context →

Question 11mediummultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company using Dynamics 365 Finance notices that the trial balance does not balance because the 'Accounts Payable' account has a negative balance. What could be the reason?

Trap 1: A prepayment invoice was posted without a purchase order

Why C is wrong

Trap 2: Intercompany transactions were posted incorrectly

Why B is wrong

Trap 3: A bank reconciliation was not performed

Why A is wrong

Study all Describe Dynamics 365 Finance common traps →

A
A prepayment invoice was posted without a purchase order
Why wrong: Why C is wrong
B
A vendor payment was posted to the wrong vendor account
Why D is correct
C
Intercompany transactions were posted incorrectly
Why wrong: Why B is wrong
D
A bank reconciliation was not performed
Why wrong: Why A is wrong

Full breakdown with real-world context →

Question 12mediumdrag order

Read the full Describe Dynamics 365 Finance explanation →

Drag and drop the steps to create a new customer record in Dynamics 365 Sales in the correct order.

Drag steps to the numbered slots on the right, or tap a step then tap a slot.

Steps

Order

1Step 1

2Step 2

3Step 3

4Step 4

5Step 5

Question 13mediumdrag order

Read the full Describe Dynamics 365 Finance explanation →

Drag and drop the steps to set up a new user in Dynamics 365 Finance and Operations in the correct order.

Drag steps to the numbered slots on the right, or tap a step then tap a slot.

Steps

Order

1Step 1

2Step 2

3Step 3

4Step 4

5Step 5

Question 14mediummatching

Read the full Describe Dynamics 365 Finance explanation →

Match each Dynamics 365 Finance module to its primary function.

Drag a concept onto its matching description — or click a concept then click the description.

Concepts

Matches

Central repository for financial data

Manage vendor invoices and payments

Manage customer invoices and collections

Plan and monitor financial resources

Track and depreciate company assets

Question 15mediummatching

Read the full Describe Dynamics 365 Finance explanation →

Match each Dynamics 365 Human Resources entity to its role.

Drag a concept onto its matching description — or click a concept then click the description.

Concepts

Matches

A specific job role within an organization

A group of related positions with shared duties

An individual employee or contractor

An organizational unit for reporting

Rules for determining employee pay

Question 16easymultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company uses Dynamics 365 Finance. The accounts payable manager wants to automate the process of matching purchase orders, product receipts, and vendor invoices. Which feature should they use?

Trap 1: Vendor collaboration

Vendor collaboration is for external vendor communication, not invoice matching.

Trap 2: Budget control

Budget control manages budget funds, not invoice matching.

Trap 3: Fixed assets management

Fixed assets management handles asset registration and depreciation.

Study all Describe Dynamics 365 Finance common traps →

A
Accounts payable invoice matching
This feature matches purchase order, product receipt, and invoice data.
B
Vendor collaboration
Why wrong: Vendor collaboration is for external vendor communication, not invoice matching.
C
Budget control
Why wrong: Budget control manages budget funds, not invoice matching.
D
Fixed assets management
Why wrong: Fixed assets management handles asset registration and depreciation.

Full breakdown with real-world context →

Question 17mediummultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A retail company uses Dynamics 365 Finance. The finance team needs to generate financial statements that comply with local regulatory requirements in multiple countries. Which module should they use?

Trap 1: Expense management

Expense management handles employee expense reports.

Trap 2: Cash and bank management

Cash and bank management focuses on bank account reconciliation.

Trap 3: General ledger

General ledger records transactions but does not generate regulatory reports.

Study all Describe Dynamics 365 Finance common traps →

A
Financial reporting
Financial reporting provides flexible reporting for multiple regulatory standards.
B
Expense management
Why wrong: Expense management handles employee expense reports.
C
Cash and bank management
Why wrong: Cash and bank management focuses on bank account reconciliation.
D
General ledger
Why wrong: General ledger records transactions but does not generate regulatory reports.

Full breakdown with real-world context →

Question 18hardmultiple choice

Read the full NAT/PAT explanation →

A multinational organization uses Dynamics 365 Finance. They need to consolidate financial data from subsidiaries that use different currencies and accounting standards. The consolidation must be performed automatically on a monthly basis. What should they configure?

Trap 1: Fixed assets management

Fixed assets management is unrelated to financial consolidation.

Trap 2: Intercompany accounting

Intercompany accounting manages transactions between entities, not consolidation.

Trap 3: Budget planning

Budget planning is for creating budgets, not consolidation.

Study all Describe Dynamics 365 Finance common traps →

A
Fixed assets management
Why wrong: Fixed assets management is unrelated to financial consolidation.
B
Intercompany accounting
Why wrong: Intercompany accounting manages transactions between entities, not consolidation.
C
Budget planning
Why wrong: Budget planning is for creating budgets, not consolidation.
D
Consolidation and currency translation
This feature automates consolidation with currency translation and elimination.

Full breakdown with real-world context →

Question 19easymultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A company is implementing Dynamics 365 Finance. They want to use AI to automatically classify vendor invoices and extract key data. Which feature should they enable?

Trap 1: Vendor collaboration

Vendor collaboration is for communication, not AI processing.

Trap 2: Optical character recognition (OCR) service

OCR is a component of AI Builder, but the feature is AI Builder.

Trap 3: Power BI reports

Power BI is for reporting, not invoice data extraction.

Study all Describe Dynamics 365 Finance common traps →

A
Vendor collaboration
Why wrong: Vendor collaboration is for communication, not AI processing.
B
Optical character recognition (OCR) service
Why wrong: OCR is a component of AI Builder, but the feature is AI Builder.
C
Power BI reports
Why wrong: Power BI is for reporting, not invoice data extraction.
D
AI Builder for invoice processing
AI Builder provides prebuilt AI models for invoice processing.

Full breakdown with real-world context →

Question 20mediummultiple choice

Read the full Describe Dynamics 365 Finance explanation →

A manufacturing company uses Dynamics 365 Finance. They need to track the cost of raw materials and finished goods across multiple production stages. Which costing method should they use?

Trap 1: Moving average

Moving average is for inventory valuation, not production costing.

Trap 2: Last in, first out (LIFO)

LIFO is not supported in Dynamics 365 Finance.

Trap 3: First in, first out (FIFO)

FIFO is an inventory valuation method, not a costing method for production.

Study all Describe Dynamics 365 Finance common traps →

A
Moving average
Why wrong: Moving average is for inventory valuation, not production costing.
B
Last in, first out (LIFO)
Why wrong: LIFO is not supported in Dynamics 365 Finance.
C
First in, first out (FIFO)
Why wrong: FIFO is an inventory valuation method, not a costing method for production.
D
Standard costing
Standard costing is used to track expected costs in production.

Full breakdown with real-world context →

Continue with 20-question session →

Free account

Track your progress over time

Create a free account to save your results and see which topics improve across sessions.

Focused Describe Dynamics 365 Finance sessions

Start a Describe Dynamics 365 Finance only practice session

Every question in these sessions is drawn from the Describe Dynamics 365 Finance domain — nothing else.

10 questions 20 questions 30 questions 50 questions

Browse all Describe Dynamics 365 Finance questions →Mixed MB-920 session

Frequently asked questions

What does the MB-920 exam test about Describe Dynamics 365 Finance?: Describe Dynamics 365 Finance questions test whether you can apply the concept in context, not just recognise a definition.
How should I use these practice questions?: Select your answer before revealing the explanation. Then read why each option is right or wrong — this active recall approach builds retention far faster than re-reading notes.
Can I practise just Describe Dynamics 365 Finance questions in a focused session?: Yes — the session launcher on this page draws every question from the Describe Dynamics 365 Finance domain. Use a 10-question session first to gauge your baseline, then move to 20 or 30 once the weak spots are clear.
Where can I practise other MB-920 topics?: Use the topic links above to move to related areas, or go back to the MB-920 question bank to see all topics.
Are these real exam questions or dumps?: These are original practice questions written to test the same concepts the MB-920 exam covers. They are not copied from any real exam or dump site.

Describe Dynamics 365 Finance only

10 questions 20 questions 30 questions 50 questions

Mixed MB-920 session

Track your progress

A free account saves results across sessions and highlights which topics need work.

Study resources

All MB-920 questions Describe Dynamics 365 Finance domain overview MB-920 exam guide

Exam traps to avoid

▸Answering from memory before reading the full scenario.
▸Missing a constraint such as cost, availability, security, scope or command context.
▸Choosing a broad answer when the question asks for the most specific fix.
▸Ignoring why the wrong options are tempting.

Describe Dynamics 365 Finance practice questions

What to know about Describe Dynamics 365 Finance

Common Describe Dynamics 365 Finance exam traps

Describe Dynamics 365 Finance questions

A company is implementing Dynamics 365 Finance and needs to configure a chart of accounts that supports multiple legal entities with different fiscal requirements. Which structure should be used?

A company uses Dynamics 365 Finance and needs to create a vendor payment that includes a discount of $50 if paid within 10 days. The invoice is for $1,000. The payment is made on day 8. What should the payment amount be?

A company is implementing Dynamics 365 Finance and needs to automate the reconciliation of bank transactions. Which feature should be used to match bank statement lines with open bank document lines based on rules?

A company needs to ensure that purchase orders cannot be created without an approved vendor. Which configuration should be used?

A company uses Dynamics 365 Finance. The CFO wants to analyze actuals vs budget across multiple departments and cost centers. Which THREE components must be set up?

A company is configuring fixed assets in Dynamics 365 Finance. They need to ensure that asset depreciation is calculated differently for tax reporting and financial reporting. Which TWO actions must be taken?

A manufacturing company is implementing Dynamics 365 Finance and wants to streamline its procure-to-pay process. They need to automatically generate purchase orders when inventory falls below a predefined level. Which feature should they configure?

A company's finance team reports that in the general ledger, the balance for the 'Office Supplies' account shows a credit balance of $500, but they expected a debit balance. What is the most likely cause of this discrepancy?

A company uses Dynamics 365 Finance and needs to ensure that all vendor invoices are approved by the department manager before payment. Which feature should they use?

A company using Dynamics 365 Finance notices that the trial balance does not balance because the 'Accounts Payable' account has a negative balance. What could be the reason?

Drag and drop the steps to create a new customer record in Dynamics 365 Sales in the correct order.

Drag and drop the steps to set up a new user in Dynamics 365 Finance and Operations in the correct order.

Match each Dynamics 365 Finance module to its primary function.

Match each Dynamics 365 Human Resources entity to its role.

A company uses Dynamics 365 Finance. The accounts payable manager wants to automate the process of matching purchase orders, product receipts, and vendor invoices. Which feature should they use?

A retail company uses Dynamics 365 Finance. The finance team needs to generate financial statements that comply with local regulatory requirements in multiple countries. Which module should they use?

A multinational organization uses Dynamics 365 Finance. They need to consolidate financial data from subsidiaries that use different currencies and accounting standards. The consolidation must be performed automatically on a monthly basis. What should they configure?

A company is implementing Dynamics 365 Finance. They want to use AI to automatically classify vendor invoices and extract key data. Which feature should they enable?

A manufacturing company uses Dynamics 365 Finance. They need to track the cost of raw materials and finished goods across multiple production stages. Which costing method should they use?

Track your progress over time

Start a Describe Dynamics 365 Finance only practice session

Related MB-920 topic practice pages

Describe Dynamics 365 Supply Chain Management practice questions