MB-920 Describe Dynamics 365 Finance Practice Question
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?
⚠ Common exam trap
A common mix-up: candidates think manual journal entries or adjusting elimination rules can fix the issue, but the core requirement is that intercompany transactions must be created through the intercompany module to be automatically eliminated during consolidation.
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
✓
Recreate the transactions using the intercompany module and delete the original orders.
The intercompany module in Dynamics 365 Finance is specifically designed to automatically generate matching transactions in both legal entities and to flag those transactions for elimination during consolidation. By recreating the transactions through the intercompany module, you ensure that the intercompany eliminations rules can correctly identify and eliminate the intercompany trade. Deleting the original orders removes the manually created purchase and sales orders that were not linked to the elimination process.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Recreate the transactions using the intercompany module and delete the original orders.
Why this is correct
Ensures automatic matching and elimination.
- ✗
Reverse the existing transactions and repost them with the same method.
Why it's wrong here
This repeats the same issue.
- ✗
Create manual elimination journal entries to correct the balances.
Why it's wrong here
Manual entries are not sustainable and may not match.
- ✗
Adjust the elimination rules to match the existing transactions.
Why it's wrong here
Elimination rules require matching entries from the intercompany module.
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