MB-310 Implement Financial Management Practice Question
You are configuring a new fixed asset group for office furniture. The company policy requires that depreciation be calculated using the reducing balance method with a 20% annual rate, and that a half-year convention be applied in the first year of service. Which two parameters must you configure in the fixed asset group or book to meet these requirements? (Choose two.)
⚠ Common exam trap
Test-takers frequently confuse where depreciation parameters are set: the rate and method are on the depreciation profile, while the convention is on the book, not directly on the fixed asset group.
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
✓
Depreciation convention set to Half year on the depreciation book.
To meet the policy, you must create a depreciation profile with the Reducing balance method and 20% rate, and set the depreciation convention to Half year on the depreciation book. These two configurations ensure the correct calculation method and first-year proration. The fixed asset group then references the book containing these settings.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Depreciation convention set to Half year on the depreciation book.
Why this is correct
The depreciation convention determines how depreciation is calculated in the first and last years of an asset's life. Setting it to Half year ensures that only half of the annual depreciation is taken in the first year, as required. This is configured on the depreciation book, which is associated with the fixed asset group. It is essential for meeting the half-year convention policy.
- ✗
Service life set to 5 years on the fixed asset group.
Why it's wrong here
The service life is specified on the fixed asset record or in the value model/book setup, not on the fixed asset group. Moreover, the requirement does not mention a specific service life; it only specifies the depreciation method and convention. Setting a service life is necessary for depreciation calculation, but it is not one of the two parameters that directly enforce the reducing balance and half-year convention.
- ✓
Depreciation profile with method set to Reducing balance and percentage set to 20%.
Why this is correct
The depreciation profile defines the calculation method and rate. Setting the method to Reducing balance and the percentage to 20% directly satisfies the policy requirement. This profile is then assigned to the fixed asset book, which is linked to the fixed asset group. Without this profile, the system would use the default method, which may not match the reducing balance requirement.
- ✗
Depreciation profile with method set to Straight line and percentage set to 20%.
Why it's wrong here
Straight line method calculates equal depreciation each year, which does not match the reducing balance requirement. Even with a 20% rate, the calculation basis differs. The policy explicitly requires reducing balance, so this profile would produce incorrect depreciation amounts. Therefore, it does not satisfy the scenario.
- ✗
Fixed asset group's depreciation rate set to 20% in the Fixed asset groups form.
Why it's wrong here
The Fixed asset groups form does not contain a field for depreciation rate. Depreciation rates are configured in the Depreciation profiles form, not directly on the fixed asset group. Although the group links to books and profiles, the rate itself is part of the depreciation profile. Therefore, this option is not a valid configuration step.
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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.