- A
Create a consolidation company and run the consolidation process, which automatically eliminates intercompany transactions.
Why wrong: Incorrect: Does not address different accounting standards.
- B
Set up a consolidation company, configure elimination rules, and use currency translation to convert to the parent's reporting currency. Also, set up additional reporting currencies for IFRS adjustments.
Correct: This automates elimination and handles multi-GAAP.
- C
Export each entity's trial balance to Excel, manually adjust for intercompany transactions, and import into a consolidation company.
Why wrong: Incorrect: This is manual and not efficient.
- D
Set up reporting currencies in each legal entity to report in both GAAP and IFRS, and use Management Reporter for consolidation.
Why wrong: Incorrect: Reporting currencies do not automate elimination.
Quick Answer
The correct answer is to set up a consolidation company, configure elimination rules, and use currency translation, with additional reporting currencies for IFRS adjustments. This design is correct because Dynamics 365 Finance uses a dedicated consolidation company to aggregate data from multiple legal entities, while elimination rules automatically remove intercompany transactions, and currency translation converts results to the parent’s reporting currency. For multi-GAAP requirements, additional reporting currencies allow the same transactions to be re-measured under different accounting standards like IFRS without duplicating data. On the MB-920 exam, this scenario tests your understanding of the consolidation process as a structured, automated workflow rather than a manual export or single-entity adjustment. A common trap is confusing reporting currencies (which apply within one legal entity) with consolidation companies (which combine multiple entities). Remember the mnemonic “C-E-R-A”: Consolidation company, Elimination rules, Reporting currencies, Adjustments for multi-GAAP.
MB-920 Describe Dynamics 365 Finance Practice Question
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.
You are the finance systems manager for a large manufacturing conglomerate using Dynamics 365 Finance. The company has multiple legal entities, each with its own chart of accounts. The CFO wants to consolidate financial results across all entities at month-end. The consolidation must eliminate intercompany transactions and adjust for differences in accounting standards (e.g., US GAAP vs IFRS). You need to design the consolidation process. 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
Set up a consolidation company, configure elimination rules, and use currency translation to convert to the parent's reporting currency. Also, set up additional reporting currencies for IFRS adjustments.
Option D is correct because using consolidation companies with elimination rules and currency translation addresses multi-GAAP consolidation. Option A is wrong because exporting to Excel is not automated. Option B is wrong because reporting currencies are for single entity, not consolidation. Option C is wrong because it does not handle elimination or different accounting standards.
Key principle: NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Create a consolidation company and run the consolidation process, which automatically eliminates intercompany transactions.
Why it's wrong here
Incorrect: Does not address different accounting standards.
- ✓
Set up a consolidation company, configure elimination rules, and use currency translation to convert to the parent's reporting currency. Also, set up additional reporting currencies for IFRS adjustments.
Why this is correct
Correct: This automates elimination and handles multi-GAAP.
Related concept
Static NAT maps one inside address to one outside address.
- ✗
Export each entity's trial balance to Excel, manually adjust for intercompany transactions, and import into a consolidation company.
Why it's wrong here
Incorrect: This is manual and not efficient.
- ✗
Set up reporting currencies in each legal entity to report in both GAAP and IFRS, and use Management Reporter for consolidation.
Why it's wrong here
Incorrect: Reporting currencies do not automate elimination.
Common exam traps
Common exam trap: NAT rules depend on direction and matching traffic
NAT is not only about the public address. The inside/outside interface roles and the ACL or rule that matches traffic are just as important.
Detailed technical explanation
How to think about this question
NAT questions usually test address translation, overload/PAT behaviour, static mappings and whether the right traffic is being translated. Read the interface direction and address terms carefully.
KKey Concepts to Remember
- Static NAT maps one inside address to one outside address.
- PAT allows many inside hosts to share one public address using ports.
- Inside local and inside global describe the private and translated addresses.
- NAT ACLs identify traffic for translation, not always security filtering.
TExam Day Tips
- Identify inside and outside interfaces first.
- Check whether the scenario needs static NAT, dynamic NAT or PAT.
- Do not confuse NAT matching ACLs with normal packet-filtering intent.
Key takeaway
NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Real-world example
How this comes up in practice
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. NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated. 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
Got this wrong? Here's your next step.
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related MB-920 NAT questions on configuration and troubleshooting.
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Describe Dynamics 365 Finance — study guide chapter
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FAQ
Questions learners often ask
What does this MB-920 question test?
Describe Dynamics 365 Finance — This question tests Describe Dynamics 365 Finance — Static NAT maps one inside address to one outside address..
What is the correct answer to this question?
The correct answer is: Set up a consolidation company, configure elimination rules, and use currency translation to convert to the parent's reporting currency. Also, set up additional reporting currencies for IFRS adjustments. — Option D is correct because using consolidation companies with elimination rules and currency translation addresses multi-GAAP consolidation. Option A is wrong because exporting to Excel is not automated. Option B is wrong because reporting currencies are for single entity, not consolidation. Option C is wrong because it does not handle elimination or different accounting standards.
What should I do if I get this MB-920 question wrong?
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related MB-920 NAT questions on configuration and troubleshooting.
What is the key concept behind this question?
Static NAT maps one inside address to one outside address.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
4 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. 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?
hard- A.Fixed assets management
- B.Intercompany accounting
- C.Budget planning
- ✓ D.Consolidation and currency translation
Why D: Correct: Consolidation [elimination] and currency translation are the key features for multi-currency, multi-standard consolidation. Option A (Intercompany accounting) handles transactions between entities but not automatic consolidation. Option B (Budget planning) is for budgeting. Option D (Fixed assets) is irrelevant.
Variation 2. A multinational corporation uses Dynamics 365 Finance to manage its financial consolidation across multiple subsidiaries with different currencies. The consolidation must adhere to local GAAP and IFRS. The finance team needs to perform consolidation with elimination of intercompany transactions automatically. What is the most efficient way to achieve this?
hard- A.Use the General ledger consolidation process and manually eliminate intercompany transactions
- ✓ B.Set up a consolidation company and use elimination rules
- C.Use the Budget control module to track intercompany balances
- D.Configure financial reporting with a reporting tree and currency translation
Why B: Consolidation with elimination of intercompany transactions is automated through a consolidation company and elimination rules. Option A would require manual adjustments. Option B is for reporting, not consolidation. Option D is not relevant.
Variation 3. A multinational corporation uses Dynamics 365 Finance with multiple legal entities. The controller wants to consolidate financial data from all subsidiaries into a single reporting entity. Which feature should be used to perform the consolidation?
hard- A.Consolidate [Transfer]
- B.Consolidate [Eliminate]
- C.Consolidate [Inquire]
- ✓ D.Consolidate [Online]
Why D: Consolidate [Eliminate] is for intercompany eliminations. Consolidate [Inquire] is for viewing. Consolidate [Transfer] only moves data. Consolidate [Online] performs the actual consolidation.
Variation 4. A multinational corporation uses Dynamics 365 Finance with multiple legal entities. The consolidation team needs to eliminate intercompany transactions automatically during the consolidation process. What is the best approach?
hard- ✓ A.Define intercompany elimination rules in the consolidation process
- B.Use consolidation companies to aggregate data without elimination
- C.Manually identify and remove intercompany transactions before consolidation
- D.Set up intercompany accounting to automatically post to both legal entities
Why A: Option D is correct because intercompany elimination rules are specifically designed to automatically eliminate intercompany transactions during consolidation. Option A is wrong because manual elimination is error-prone and not automated. Option B is wrong because consolidation companies aggregate data but do not eliminate intercompany transactions automatically. Option C is wrong because the intercompany accounting module records transactions but does not eliminate them during consolidation.
Last reviewed: Jun 21, 2026
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