MB-920 Intercompany purchase orders Practice Question
You are the system administrator for Contoso Ltd., a multinational manufacturing company implementing Dynamics 365 Finance. The company has three legal entities: Contoso US (functional currency USD), Contoso Germany (EUR), and Contoso Japan (JPY). The CFO requires that all purchase orders for raw materials be centrally managed from Contoso US, but the goods must be received directly at each legal entity's warehouse. Additionally, the CFO wants to ensure that intercompany transactions are automatically posted and eliminated during month-end consolidation. You need to configure the system to meet these requirements. What should you do?
⚠ Common exam trap
Candidates may confuse intercompany purchase orders with direct delivery versus intercompany inventory transfers or journals. The key is that purchase orders must be centrally managed, not inventory movements.
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
✓
Configure intercompany purchase orders with direct delivery from Contoso US to the other entities, and set up intercompany elimination rules for consolidation.
Configuring intercompany purchase orders with direct delivery allows Contoso US to centrally manage purchasing while goods are received directly at each legal entity's warehouse. Setting up intercompany elimination rules ensures automatic elimination of intercompany transactions during consolidation, meeting the CFO's requirements. Option A is wrong because separate purchase orders and manual journals do not automate centralization or elimination. Option C is wrong because inventory transfers do not handle purchase order centralization. Option D is wrong because intercompany journals alone do not provide centralized purchasing or direct receipt functionality.
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 separate purchase orders in each legal entity and use manual journal entries to transfer costs to Contoso US.
Why it's wrong here
Incorrect: This does not centralize purchasing and requires manual effort.
- ✓
Configure intercompany purchase orders with direct delivery from Contoso US to the other entities, and set up intercompany elimination rules for consolidation.
Why this is correct
Correct: This allows centralized purchasing while goods are received directly at each entity, and elimination is automated.
- ✗
Configure intercompany inventory transfers and use inventory journals to record movements between warehouses.
Why it's wrong here
Incorrect: Inventory transfers are for stock movement, not purchase orders.
- ✗
Set up intercompany journals to record transactions between legal entities and create elimination rules for consolidation.
Why it's wrong here
Incorrect: This does not address centralized purchasing with direct receipt.
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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.