MB-310 Manage Fixed Assets Practice Question
A company is setting up a fixed asset that was acquired in a foreign currency. The company's accounting currency is USD, and the asset was purchased for 10,000 EUR. The exchange rate at acquisition was 1.2 USD/EUR. The company wants to ensure that the asset's historical cost in USD is correctly recorded and that any subsequent exchange rate fluctuations do not affect the asset's depreciation. Which setup should be used?
⚠ Common exam trap
The trap here is assuming that fixed assets are revalued for exchange rate changes like monetary assets; instead, they are non-monetary and recorded at historical cost.
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
✓
Record the acquisition in the fixed asset journal with the USD equivalent using the exchange rate at acquisition, and do not revalue the fixed asset for exchange rate changes.
Fixed assets in Dynamics 365 Finance are recorded in the accounting currency using the exchange rate at the acquisition date. The historical cost is fixed, and subsequent exchange rate movements do not affect the asset's value or depreciation. This treatment is consistent with accounting standards for property, plant, and equipment.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Record the acquisition in the fixed asset journal with the USD equivalent using the exchange rate at acquisition, and do not revalue the fixed asset for exchange rate changes.
Why this is correct
In Dynamics 365 Finance, fixed assets are recorded in the accounting currency. The acquisition should be recorded at the exchange rate on the acquisition date, resulting in a historical cost of $12,000. Subsequent exchange rate fluctuations do not affect the fixed asset's cost or depreciation because fixed assets are not revalued for currency fluctuations under typical setups. This ensures stable depreciation.
- ✗
Record the acquisition in the fixed asset journal with the EUR amount and let the system convert using the daily exchange rate.
Why it's wrong here
Recording in EUR and letting the system convert at the daily rate would use the rate on the acquisition date, which might be correct, but it does not address subsequent fluctuations. The fixed asset subledger stores the transaction in the accounting currency, so the historical cost is fixed at the acquisition rate. However, this option does not explicitly prevent revaluation of the asset due to exchange rate changes.
- ✗
Set up the fixed asset in EUR and use a reporting currency for USD.
Why it's wrong here
Fixed assets are always recorded in the accounting currency. Setting up the asset in EUR is not possible because the fixed asset subledger only stores amounts in the accounting currency. Reporting currency is used for financial reporting, not for the subledger, so this would not correctly record the asset or its depreciation.
- ✗
Use a revaluation group to periodically adjust the asset's value for exchange rate changes.
Why it's wrong here
Revaluation groups are used for revaluing fixed assets to fair value or for other revaluation purposes, not for exchange rate adjustments. Using a revaluation group would unnecessarily complicate the asset's value and could distort depreciation. Exchange rate fluctuations are typically not applied to fixed assets.
About these practice questions
This MB-310 question is part of Courseiva's 211-question bank — original exam-style content with full explanations and wrong-answer analysis, never real exam questions or exam dumps. Learn why practice questions differ from exam dumps →
JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
This MB-310 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-310 exam.