HOTSPOT
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A company uses Dynamics 365 Finance.
The company has prepaid insurance expenses at the beginning of the calendar year that cover the entire year. The company must expense the prepaid insurance automatically and equally during a month-end process.
You need to configure the accrual scheme.
How should you configure the accrual scheme? To answer, select the appropriate options in the answer area.
NOTE: Each correct answer is worth one point.
Show Answer
Correct Answer: Debit: Insurance expense account
Credit: Prepaid insurance account
Accrual basis: Calendar
Post in week, month, or quarter: End
Explanation: Monthly amortization of prepaid insurance increases expense (debit) and reduces the prepaid asset (credit). A calendar basis spreads the amount evenly by month, and posting at the end aligns with month‑end processing.
Question 115
HOTSPOT
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A company uses Microsoft Dynamics 365 Finance to manage their computer hardware and support services.
A customer purchases the following three items on a sales order:
• laptop
• two tutoring sessions for use within the first year after purchase
• one-year warranty
Which item should you consider for the revenue recognition process? To answer, select the appropriate options in the answer area.
NOTE: Each correct selection is worth one point.
Show Answer
Correct Answer: At the time of invoicing:
Laptop
On a schedule that is based on occurrence:
Tutoring sessions
Explanation: The laptop is a delivered product, so revenue is recognized at invoicing. Tutoring sessions are services consumed over time, so revenue is recognized based on occurrence. The standard one-year warranty is not treated as a separate revenue recognition item.
Question 116
You need to ensure the budget only reflects a single annual cost of living increase for Humongous Insurance employees.
What should you do? Each correct answer presents a complete solution.
NOTE: Each correct selection is worth one point.
A. Align the calendar year to a single budget cycle.
B. Align a calendar year to multiple budget cycles.
C. Align the fiscal year to a single budget cycle.
D. Align the fiscal year to multiple budget cycles.
Show Answer
Correct Answer: A, C
Explanation: To ensure only one annual cost-of-living increase is reflected, the budget must be tied to a single annual budgeting cycle so the increase is applied once.
Aligning the calendar year to a single budget cycle (A) ensures the COLA is applied once per calendar year.
Aligning the fiscal year to a single budget cycle (C) also ensures the COLA is applied once per fiscal year.
Aligning to multiple budget cycles (B or D) would risk applying the increase more than once.
Question 117
A company uses Dynamics 365 Finance to include multiple business units as a financial dimension.
All customer payment journals must be posted to the headquarters’ business unit financial dimension.
You need to configure the accounts receivable journal name.
What should you configure?
A. Journal control
B. Posting restriction
C. Default financial dimension
D. Journal approval
Show Answer
Correct Answer: C
Explanation: To ensure customer payment journals default to the headquarters business unit, you configure the Accounts receivable journal name with a Default financial dimension. This automatically populates the specified business unit on journal lines. Posting restrictions and journal approval do not control default dimension values, and journal control does not enforce dimensions for customer-type journal lines.
Question 118
A company uses expense management in Dynamics 365 Finance. The company has two legal entities.
CompanyA reimburses employees for travel-related expenses. CompanyB plans to reimburse remote employees monthly for travel-related expenses. All employees are required to complete expense reports.
You need to configure the expense type that can be used for both companies.
Which expense type category should you use?
A. Case
B. Shared
C. Project
D. Procurement
Show Answer
Correct Answer: B
Explanation: In Dynamics 365 Finance, a Shared expense category can be used across multiple legal entities. This fits the requirement because both CompanyA and CompanyB need to use the same expense type for employee travel reimbursements, even though they are separate companies. Shared categories allow expenses to be reported and reimbursed across legal entities, unlike Project, Procurement, or Case categories which are more limited in scope.
Question 119
You are implementing Dynamics 365 Finance.
You commonly complete the sale of goods across international borders.
You need to configure the system.
What should you use?
A. bank statements
B. purchase agreement
C. letters of credit
D. promissory note
Show Answer
Correct Answer: C
Explanation: In Dynamics 365 Finance, letters of credit are the appropriate configuration for handling international sales of goods. They are a standard instrument in cross‑border trade, providing a bank‑backed guarantee of payment to the seller and reducing financial risk between parties in different countries. The other options do not provide this level of security or are not intended for managing international trade payments.
Question 120
HOTSPOT
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A company is implementing Microsoft Dynamics 365 Finance.
The company is implementing the Fixed asset module and requires the following configuration:
• Set the threshold for fixed asset acquisitions at $10,000.
• Fixed asset acquisitions must be allowed from purchasing.
You need to configure the system.
Which parameter should you use? To answer, select the appropriate options in the answer area.
NOTE: Each correct selection is worth one point.
Show Answer
Correct Answer: Capitalization threshold
Allow asset acquisition from purchasing
Explanation: The capitalization threshold parameter defines the minimum amount for fixed asset capitalization, such as $10,000. The Allow asset acquisition from purchasing parameter enables creating fixed assets directly from purchase orders and invoices.
Question 121
A company uses Microsoft Dynamics 365 Finance and Dynamics 365 Project Operations.
The company must associate fixed assets with subprojects to track the money that the company spends to maintain assets.
You need to configure subprojects to track the associated fixed asset transactions.
Which two types of subprojects can you use? Each correct answer presents a complete solution.
NOTE: Each correct selection is worth one point.
A. Cost
B. Investment
C. Fixed price
D. Time and material
E. Internal
Show Answer
Correct Answer: A, E
Explanation: In Dynamics 365 Finance and Project Operations, only Cost projects and Internal projects support associating fixed asset transactions with subprojects. These project types are designed for internal cost tracking and capitalization scenarios, allowing fixed asset acquisition and maintenance costs to be tracked against assets. Fixed price, Time and material, and Investment projects are intended for customer-facing or different accounting purposes and do not support this fixed asset integration.
Question 122
DRAG DROP
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A company that manufactures consumer electronics goods uses Microsoft Dynamics 365 Finance.
You need to configure capitalization thresholds for products based on the following requirements:
In which order should you perform the actions? To answer, move all actions from the list of actions to the answer area and arrange them in the correct order.
Show Answer
Correct Answer: Create fixed asset groups.
Define an organization-wide identifier for fixed assets.
Define and configure the procurement categories and link to the products.
Define an organization-wide business rule for fixed asset determination.
Explanation: Fixed asset groups and identifiers must exist first. Procurement categories are then linked to products so they can be evaluated. Finally, fixed asset determination rules use categories, groups, and identifiers to apply capitalization thresholds (such as for televisions).
Question 123
HOTSPOT -
You need to configure the expense module for reimbursement.
How should you configure the expense module? To answer, select the appropriate options in the answer area.
NOTE: Each correct selection is worth one point.
Hot Area:
Show Answer
Correct Answer: Box 1:
Configure the personal card expense category.
Box 2:
Reconcile the expense through a credit card transaction import.
Explanation: The expense is recorded using a personal card, so the expense category must be configured for personal card reimbursement. For reimbursement processing, the expense is settled by reconciling it through imported credit card transactions, not by configuring the employee as a vendor or customer.
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