MB-920 Describe Dynamics 365 Finance Practice Question
You are the finance system administrator for Contoso Ltd., a global manufacturing company with legal entities in the United States, Germany, and Japan. Each entity uses Dynamics 365 Finance and has its own chart of accounts due to local reporting requirements. The CFO wants to consolidate the financial results of all entities into a single consolidated report at the end of each month. Currently, the consolidation is done manually by exporting data to Excel, which is error-prone and time-consuming. The CFO wants to use the consolidation functionality within Dynamics 365 Finance. Additionally, intercompany transactions between entities are significant, and the CFO wants to automate the elimination of these transactions during consolidation. You need to design a solution that meets the following requirements: - Use the Dynamics 365 Finance consolidation module. - Automate the elimination of intercompany transactions. - Allow each entity to maintain its own chart of accounts. - Generate consolidated financial statements in the US GAAP format.
What should you do?
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 a separate consolidation legal entity, set up consolidation groups and accounts to map the different charts, and configure intercompany elimination rules.
To consolidate with different charts of accounts, you must create a consolidation company that uses a chart of accounts for US GAAP, and set up consolidation groups and accounts to map the source accounts. Intercompany elimination rules can be defined to automate eliminations. Option A is wrong because it suggests changing all entities to use the same chart, which contradicts the requirement. Option C is wrong because setting up child companies does not solve the chart of accounts mapping or intercompany elimination. Option D is wrong because Power BI is not the consolidation module and cannot automate eliminations.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Define the same chart of accounts in all legal entities and then use the consolidation online functionality to consolidate.
Why it's wrong here
This would require changing existing charts, which is not desired.
- ✓
Create a separate consolidation legal entity, set up consolidation groups and accounts to map the different charts, and configure intercompany elimination rules.
Why this is correct
This leverages the consolidation module and automates eliminations while preserving local charts.
- ✗
Set up the German and Japanese entities as child companies under the US entity, and then run consolidation.
Why it's wrong here
Child companies are not a standard concept; consolidation uses a separate legal entity.
- ✗
Use Power BI to connect to each legal entity's data and create consolidated reports with calculated columns to eliminate intercompany transactions.
Why it's wrong here
Power BI is not the native consolidation tool and does not automate elimination in the ERP.
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