Quick Answer
The answer is vendor invoice entry and purchase order generation. These are the two valid methods for posting vendor invoices in Dynamics 365 Finance because the system is designed to handle vendor payables either by manually entering invoices directly into the vendor invoice form or by automatically generating them from purchase orders, which creates a three-way matching process with the receipt and the PO. On the Microsoft Dynamics 365 Fundamentals ERP MB-920 exam, this question tests your understanding of the Accounts Payable module’s core workflows, often appearing as a multiple-select item where you must distinguish vendor-specific processes from customer or general ledger transactions. A common trap is confusing free text invoices, which are for non-PO customer billing, or general journals, which are for adjusting entries, with vendor invoice posting. Remember the memory tip: “Vendors come from POs or manual entry, never from sales or free text.”
This MB-920 practice question tests your understanding of describe dynamics 365 finance. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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.
Which TWO are valid methods for posting vendor invoices in Dynamics 365 Finance?
General journal entry
Why wrong: General journals are for adjusting entries, not vendor invoices.
Sales order invoice
Why wrong: Sales order invoices are for customer sales.
Purchase order-based invoice
Invoices can be generated from purchase orders.
Vendor invoice entry
Manual entry of vendor invoices is a standard method.
Free text invoice
Why wrong: Free text invoices are for customer invoices, not vendor.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Purchase order-based invoice
Options B and D are correct. Vendor invoices can be entered manually through the vendor invoice form or generated from purchase orders. Option A is wrong because general journals are for manual journal entries, not vendor invoices. Option C is wrong because free text invoices are for non-PO invoices to customers. Option E is wrong because sales orders are for customer transactions.
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.
General journal entry
Why it's wrong here
General journals are for adjusting entries, not vendor invoices.
Sales order invoice
Why it's wrong here
Sales order invoices are for customer sales.
Purchase order-based invoice
Why this is correct
Invoices can be generated from purchase orders.
Related concept
Read the scenario before looking for a memorised answer.
Vendor invoice entry
Why this is correct
Manual entry of vendor invoices is a standard method.
Related concept
Read the scenario before looking for a memorised answer.
Free text invoice
Why it's wrong here
Free text invoices are for customer invoices, not vendor.
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
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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: Purchase order-based invoice — Options B and D are correct. Vendor invoices can be entered manually through the vendor invoice form or generated from purchase orders. Option A is wrong because general journals are for manual journal entries, not vendor invoices. Option C is wrong because free text invoices are for non-PO invoices to customers. Option E is wrong because sales orders are for customer transactions.
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.
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Same concept, more angles
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. Which TWO are valid options for posting vendor invoices in Dynamics 365 Finance? (Select TWO.)
easyWhy A: Option B is correct because invoices can be posted directly from the vendor invoice journal. Option D is correct because the purchase order invoice posting process posts invoices after receipt. Option A is wrong because payment journals are for payments, not invoices. Option C is wrong because sales orders are for customers. Option E is wrong because production orders are for manufacturing.
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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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