A customer uses bank reconciliation functionality in Dynamics 365 Finance.
The customer finds a transaction in a closed fiscal period that must be corrected.
You need to correct the transaction.
How should you make this correction?
A. Use the Correction amount field.
B. Open the fiscal pend.
C. Create a new line for the transaction in the closed period.
D. Create a new line for the transaction in an open period.
Show Answer
Correct Answer: D
Explanation: If the transaction is in a closed fiscal period, you should not reopen the period or use the Correction amount field for that transaction. Instead, create a correcting transaction dated in an open fiscal period, preserving the appropriate financial dimensions and offset account to maintain audit integrity. This is the supported approach for correcting transactions from closed periods.
Question 155
A company has implemented Dynamics 365 Finance.
The company pays taxes quarterly to the states of Florida, Nebraska, and Washington. These states have been set up as tax authorities within Dynamics 365 Finance.
You need to configure the system to remit tax payments.
What should you do?
A. Associate the vendor record to the tax authority.
B. Set up a customer record for the tax authority.
C. Associate the vendor record to the settlement period.
D. Set up the jurisdiction and associate the jurisdiction to the tax authority.
Show Answer
Correct Answer: A
Explanation: To remit sales tax payments in Dynamics 365 Finance, each tax authority must be linked to a vendor account. The settlement process uses the vendor associated with the tax authority to generate the payable/payment when sales tax is settled. Customer records and jurisdictions are not used for remitting payments, and the vendor is associated with the tax authority rather than the settlement period.
Question 156
A company uses Microsoft Dynamics 365 Finance. You are evaluating delinquent customers. You examine aging balances and determine that a customer's balance must be written off.
You need to use journal lines to perform the write-off process.
Which two journal line types will be created? Each correct answer presents part of the solution.
NOTE: Each correct selectin is worth one point.
A. General ledger entry
B. Not sufficient funds (NSF) payment entry
C. Customer entry
D. Item transaction entry
Show Answer
Correct Answer: A, C
Explanation: Writing off a customer's balance using a customer write-off journal creates a customer entry to clear the customer's accounts receivable balance and a corresponding general ledger entry to recognize the write-off (such as bad debt expense or the designated write-off account). NSF payment entries are for returned payments, and item transaction entries are unrelated because inventory transactions are not affected by an AR write-off.
Question 157
A company plans to allocate revenue across occurrences by using recognition basis.
Which recognition basis can you use?
A. Actual start date
B. Mid-month split
C. First of month
D. Monthly by dates
Show Answer
Correct Answer: D
Explanation: The question asks for a recognition basis, not a recognition convention. 'Actual start date' is a recognition convention, while 'Monthly by dates' (often referred to in documentation as 'Monthly by days') is a recognition basis that allocates revenue based on the actual days in each calendar month.
Question 158
You are implementing Dynamics 365 Finance.
Sales tax should be calculated when the sales orders are entered. During testing, you find the sales tax is not calculating as expected.
You need to validate sales tax has been set up correctly.
Which two actions should you do? Each correct answer presents part of the solution.
NOTE: Each correct selection is worth one pint.
A. Validate the default item sales tax group setup for the item being sold.
B. Associate the sales tax jurisdiction to the item sales tax group associated to the item being sold.
C. Validate a default sales tax code has been set up on the customer from the sales order.
D. Validate the sales tax group setting on the customer from the sales order.
E. Validate a default item sales tax code has been set up on the item being sold.
Show Answer
Correct Answer: A, D
Explanation: Sales tax calculation in Dynamics 365 Finance depends on the combination of the customer's Sales tax group and the item's Item sales tax group. Validating the default Item sales tax group on the item and the Sales tax group on the customer are the key setup checks. Items and customers do not use default sales tax codes directly for this purpose, and tax jurisdictions are associated with sales tax codes/groups rather than directly with the item sales tax group.
Question 159
A client is implementing accounts receivable in Dynamics 365 Finance.
You need to determine which requirements can be met by configuring the customer posting profile.
Which three requirements can be met? Each correct answer presents a complete solution.
NOTE: Each correct selection is worth one point.
A. Specifying a receivable account for certain customers
B. Setting an interest code for a group of customers
C. Specifying a revenue account for sales orders transactions
D. Setting terms of payment for a group of customers
E. Setting the liquidity ledger account used for cash flow forecast
Show Answer
Correct Answer: A, B, E
Explanation: Customer posting profiles control the AR summary (receivables) account by customer/group, can assign an interest code used for interest note processing, and include the liquidity account used for cash flow forecasting. Revenue (sales) accounts are determined through item posting/item groups rather than the customer posting profile, and terms of payment are configured on customer records or groups, not in the posting profile.
Question 160
A company implements Microsoft Dynamics 365 Finance to manage fixed assets. The company adds a laptop as a fixed asset.
You run a depreciation proposal. You observe that laptops are not eligible for depreciation.
You need to determine why you cannot depreciate the laptops.
Which feature should you review?
A. Depreciation convention
B. Net book value
C. Capitalization threshold
D. Number sequence
E. Posting layer
Show Answer
Correct Answer: C
Explanation: The capitalization threshold determines whether a fixed asset is eligible for depreciation. If an acquired asset does not meet the configured capitalization threshold, the fixed asset can still be created, but its Calculate depreciation setting is set to No, so it is excluded from depreciation proposals. The other options do not directly make an asset ineligible for depreciation in this scenario.
Question 161
You need to configure the system to meet the fiscal year requirements.
What should you do?
A. Add an additional fiscal year.
B. Divide the twelfth period.
C. Add an additional period to ledger calendars.
D. Create a closing period.
E. Create a new fiscal calendar.
Show Answer
Correct Answer: D
Explanation: To support fiscal year-end adjustments while keeping regular monthly periods intact, configure a dedicated closing period. A closing period is used for year-end closing and adjustment entries and functions as the accounting equivalent of a virtual 13th period without changing the fiscal calendar structure or adding normal accounting periods. Adding a fiscal year, splitting period 12, adding a ledger period, or creating a new fiscal calendar do not specifically address the year-end closing requirement.
Question 162
HOTSPOT -
A company implements basic budgeting functionality in Dynamics 365 Finance.
The company has 6-digit mam account numbers. Two account structures are used as follows:
• Profit and loss, which includes main account for revenue and expense account.
• Balance sheet, which includes main account for asset liability, and equity.
The accounts start with the following numbers:
Asset: 1 -
Liability: 2 -
Equity: 3 -
Revenue: 4 -
Cost of goods sold: 5 -
Selling expense: 6 -
Administration expense: 7 -
Other Income and expense: 8 -
The company allows budget transfers only between the selling expense account and revenue accounts.
You need to configure a budget transfer rule for the selling expense account.
What should you configure?
To answer, select the appropriate option in the answer area.
NOTE: Each correct answer is worth one point.
Show Answer
Correct Answer: Profit and loss
Main account
Begins with
6
Explanation: Selling expense accounts are part of the Profit and loss account structure. The rule should filter on the Main account segment, using 'Begins with' value 6 to match all selling expense accounts (6xxxxx).
Question 163
You are configuring taxes in Dynamics 365 Finance for a client.
Vendor invoices require a five percent sales tax calculation. Per government rules, the client can recover only 60 percent of this five percent sales tax amount against certain commodities. The remaining 40 percent is non-recoverable.
You need to configure the sales taxes to post to the expense account.
Where should you configure the sales tax percentage?
A. Sales tax group
B. Ledger posting groups
C. Tax code
D. Item sales tax group
Show Answer
Correct Answer: C
Explanation: The sales tax percentage is configured on the Tax code in Dynamics 365 Finance. The Tax code defines the tax rate and also supports non-deductible (non-recoverable) percentages, allowing only a portion of the tax (for example, 60%) to be recoverable while the remaining 40% is posted to the expense account. Sales tax groups and item sales tax groups determine applicability, and ledger posting groups control posting accounts, not the tax percentage.
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