Intercompany Accounting Required Configurations in Dynamics 365 Finance
Which TWO configurations are required to enable intercompany accounting in Dynamics 365 Finance?
Quick Answer
The answer is intercompany partner definition and intercompany accounting sequences. These two configurations are required to enable intercompany accounting in Dynamics 365 Finance because the system needs a formal relationship between legal entities—defined through intercompany partners—and a dedicated number sequence to track transactions between those entities. Without both, the intercompany module cannot process or record cross-entity trade. On the MB-920 exam, this question tests your understanding of foundational setup steps versus optional enhancements; a common trap is confusing a shared chart of accounts (beneficial but not mandatory) or budget control (unrelated) as requirements. Remember the memory tip: "Partners and sequences—the pair that opens intercompany sequences."
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
✓
Intercompany accounting sequences
Options A and B are correct. Intercompany accounting sequences must be set up to define the document numbering for intercompany transactions, and intercompany partners must be defined to establish the legal entities involved. Option C is incorrect because a shared chart of accounts is beneficial but not required. Option D is incorrect because currency revaluation is a separate process not mandatory for intercompany accounting. Option E is incorrect because budget control configuration is unrelated to intercompany accounting.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Intercompany accounting sequences
Why this is correct
Required for transaction processing.
- ✓
Intercompany partner definition
Why this is correct
Defines the relationships between entities.
- ✗
Shared chart of accounts across legal entities
Why it's wrong here
Helpful but not required for intercompany accounting.
- ✗
Currency revaluation rules
Why it's wrong here
Separate process for foreign currency.
- ✗
Budget control configuration
Why it's wrong here
Not related to intercompany accounting.
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Same concept, more angles
2 more ways this is tested on MB-920
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 THREE of the following are valid configurations for intercompany accounting in Dynamics 365 Finance?
hard- ✓ A.Elimination rules can be defined to automatically remove intercompany transactions during consolidation.
- B.Intercompany transactions must use the same currency.
- ✓ C.Intercompany journals can be automatically posted to both legal entities.
- D.Each intercompany transaction must be posted to a separate legal entity.
- ✓ E.Intercompany sales orders and purchase orders can be automatically generated.
Why A: Options A, C, and E are correct. A: Elimination rules can be defined to automatically remove intercompany transactions during consolidation, which is a standard feature in Dynamics 365 Finance. C: Intercompany journals can be set up to post automatically to both legal entities involved, streamlining the accounting process. E: Intercompany sales orders and purchase orders can be automatically generated through intercompany workflows, reducing manual effort. Options B and D are incorrect. B: Intercompany transactions do not require the same currency; they can be in different currencies with exchange rate adjustments. D: While intercompany transactions involve multiple legal entities, they are not posted separately to a distinct legal entity for each transaction; they are posted within the same legal entity setup.
Variation 2. Which THREE of the following are requirements for setting up 'Intercompany accounting' in Dynamics 365 Finance?
hard- ✓ A.Trading partner relationships must be defined between legal entities.
- B.All legal entities must use a shared chart of accounts.
- ✓ C.Intercompany journals must be set up.
- ✓ D.Elimination rules must be configured for consolidation.
- E.All legal entities must use the same currency.
Why A: Options A, C, and D are correct. Intercompany accounting requires trading partner relationships, intercompany journals, and elimination rules. Option B is wrong because a shared chart of accounts is not required; each legal entity can have its own. Option E is wrong because a single currency is not required; different currencies are allowed.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.