The correct answer is to set up intercompany accounting and define intercompany partners. This configuration is required because intercompany accounting in Dynamics 365 Finance establishes the rules for automatically posting and reconciling transactions between legal entities, ensuring that matching entries are created and settled without manual intervention. On the Microsoft Dynamics 365 Fundamentals ERP MB-920 exam, this question tests your understanding of core financial process automation, often appearing as a trap where candidates confuse intercompany setup with consolidation or elimination rules. A common mistake is selecting consolidation, which combines financial statements, or elimination rules, which remove intercompany balances during consolidation—neither of which handles the automatic reconciliation of live transactions. Remember the memory tip: intercompany accounting is for live transactions between partners, while consolidation is for reporting after the fact.
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.
Your organization is implementing Dynamics 365 Finance and needs to ensure that intercompany transactions are automatically reconciled. Which setup is required?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Set up intercompany accounting and define intercompany partners.
Option A is correct because intercompany accounting setup defines the rules for automatic posting and reconciliation of intercompany transactions. Option B is wrong because consolidation is for combining financial statements of multiple legal entities, not for intercompany reconciliation. Option C is wrong because elimination rules are part of consolidation to remove intercompany balances. Option D is wrong because allocation rules are for distributing costs.
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.
✗
Define elimination rules for intercompany transactions.
Why it's wrong here
Elimination rules are used during consolidation to remove intercompany balances.
✗
Create allocation rules for intercompany charges.
Why it's wrong here
Allocation rules distribute costs, not reconcile transactions.
✓
Set up intercompany accounting and define intercompany partners.
Why this is correct
This enables automatic posting and reconciliation between entities.
Related concept
Static NAT maps one inside address to one outside address.
✗
Configure consolidation processes.
Why it's wrong here
Consolidation is a separate process for reporting, not for automatic intercompany reconciliation.
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 startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
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.
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 intercompany accounting and define intercompany partners. — Option A is correct because intercompany accounting setup defines the rules for automatic posting and reconciliation of intercompany transactions. Option B is wrong because consolidation is for combining financial statements of multiple legal entities, not for intercompany reconciliation. Option C is wrong because elimination rules are part of consolidation to remove intercompany balances. Option D is wrong because allocation rules are for distributing costs.
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 →
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. Your organization is implementing Dynamics 365 Finance and needs to manage intercompany transactions between two legal entities. The transactions should be automatically reconciled in the general ledger. Which configuration is required?
medium
A.Currency revaluation
B.Organization hierarchy
✓ C.Intercompany accounting
D.Consolidation
Why C: Intercompany accounting setup enables automatic generation and elimination of intercompany transactions. Option A is for currency translation. Option C is for consolidation. Option D is for company information.
Variation 2. Which TWO of the following are features of Dynamics 365 Finance for managing intercompany transactions?
medium
✓ A.Intercompany accounting
B.Consolidation
C.Fixed asset management
✓ D.Elimination rules
E.Budget control
Why A: Option A and Option D are correct. Intercompany accounting allows transactions between legal entities, and elimination rules remove intercompany activity for consolidation. Option B is wrong because consolidation is a separate feature for combining financials. Option C is wrong because budget control is for budget management. Option E is wrong because fixed asset management is for asset tracking.
Last reviewed: Jun 21, 2026
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
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.
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.