MB-310 Implement Financial Management Practice Question
A company uses Dynamics 365 Finance and has a legal entity in the United States (USMF) and one in the United Kingdom (GBMF). The US entity sells goods to the UK entity. The US entity wants to record the intercompany sale and the UK entity wants to record the intercompany purchase. Both entities use the same chart of accounts but different accounting currencies (USD and GBP). The intercompany accounting relationship is set up with the 'Intercompany' option enabled. When the US entity creates and posts an intercompany sales order, what happens in the UK entity?
⚠ Common exam trap
The trap here is assuming that intercompany purchase orders are always manually posted, when in fact auto-post can be enabled to fully automate the process.
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
✓
An intercompany purchase order is automatically created in the UK entity, and it is automatically confirmed and posted if the 'Auto-post' option is enabled.
When an intercompany sales order is posted in the US entity, the system automatically creates an intercompany purchase order in the UK entity. If the intercompany relationship is configured with the 'Auto-post' option enabled for purchase orders, the system will automatically confirm and post the purchase order. This ensures that both sides of the transaction are recorded without manual intervention. The accounting currency difference is handled by the system using the exchange rate defined in the intercompany relationship.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
An intercompany purchase order is automatically created in the UK entity, but it must be manually confirmed and posted.
Why it's wrong here
When an intercompany sales order is posted in the US entity, the system automatically creates a corresponding intercompany purchase order in the UK entity. However, the purchase order is created in a 'Pending' or 'Confirmed' status depending on the configuration, but it is not automatically posted. The UK entity must manually confirm and post the purchase order to record the purchase and the intercompany payable. This option incorrectly states that it must be manually confirmed and posted, which is partially true, but the automatic creation happens; the posting is not automatic. The key is that the purchase order is created automatically, but posting requires manual action.
- ✓
An intercompany purchase order is automatically created in the UK entity, and it is automatically confirmed and posted if the 'Auto-post' option is enabled.
Why this is correct
In Dynamics 365 Finance, when an intercompany sales order is posted, the system automatically creates an intercompany purchase order in the corresponding legal entity. If the intercompany relationship is configured with the 'Auto-post' option enabled for the purchase order, the system will automatically confirm and post the purchase order. This results in the intercompany purchase being recorded without manual intervention. The accounting currency difference is handled by the system using the exchange rate defined for the intercompany relationship. This is the correct behavior when auto-post is enabled.
- ✗
An intercompany purchase order is automatically created in the UK entity, but it uses the US entity's accounting currency (USD) instead of the UK entity's accounting currency (GBP).
Why it's wrong here
The intercompany purchase order is created in the UK entity and uses the UK entity's accounting currency (GBP). The system converts amounts using the exchange rate defined for the intercompany relationship. It does not use the US entity's accounting currency. Each legal entity maintains its own accounting currency, and intercompany transactions are recorded in the respective entity's currency with appropriate exchange rate adjustments. Therefore, this option is incorrect.
- ✗
An intercompany purchase order is not automatically created; the UK entity must manually create a purchase order and link it to the sales order.
Why it's wrong here
Intercompany sales order posting automatically generates the corresponding intercompany purchase order in the buyer legal entity. Manual creation is not required. The system uses the intercompany relationship to determine the buyer entity and creates the purchase order based on the sales order lines. This automation is a core feature of intercompany accounting in Dynamics 365 Finance. Therefore, stating that it is not automatically created is false.
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Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
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