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: In Dynamics 365 revenue recognition, a recognition basis defines how revenue is allocated across occurrences. Options like Actual start date, Mid-month split, and First of month are recognition conventions, not bases. 'Monthly by dates' (also referred to as Monthly by days) is a valid recognition basis because it allocates revenue based on the actual number of days in each month.
Question 155
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: In Dynamics 365 Finance, sales tax calculation on sales orders is driven by the combination of the item sales tax group (from the item) and the sales tax group (from the customer). To validate correct tax calculation, you must ensure the item has the correct default item sales tax group and the customer has the correct sales tax group. Individual sales tax codes are not directly defaulted on items or customers for sales orders, and tax jurisdictions are linked to tax codes, not directly to item sales tax groups.
Question 156
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: The customer posting profile controls how accounts receivable transactions post to the general ledger. It allows you to specify the receivable (summary) account per customer or customer group (A), define interest-related posting behavior used for customers covered by the profile (B), and specify the liquidity ledger account used for cash flow forecasting (E). Revenue accounts are defined through sales posting profiles, not customer posting profiles, and terms of payment are set on the customer or customer group, not in the posting profile.
Question 157
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: In Dynamics 365 Finance, the capitalization threshold controls whether an asset is eligible for depreciation. If the asset’s acquisition cost is below the defined threshold, the fixed asset can still be created, but the Calculate depreciation option is set to No, causing it to be excluded from depreciation proposals. Therefore, reviewing the capitalization threshold explains why the laptops cannot be depreciated.
Question 158
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 meet fiscal year requirements—specifically to support year-end adjustments without impacting regular monthly reporting—the correct approach is to create a closing period. A closing period (often referred to as a 13th period) is used exclusively for year-end and audit adjustments, ensuring that period 12 operational results remain intact. Creating a new fiscal calendar or adding/dividing periods would unnecessarily change the standard reporting structure.
Question 159
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 structure. Budget transfer rules should filter on the main account dimension, and selling expense accounts are identified by account numbers that begin with 6.
Question 160
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: In Dynamics 365 Finance, the sales tax percentage and the recoverable versus non-recoverable (non-deductible) portion of tax are configured on the Tax code. The tax code allows you to define the tax rate (5%) and specify the non-deductible percentage (40%), which ensures the non-recoverable portion is posted to the expense account. Sales tax groups and item sales tax groups only determine applicability, not percentages.
Question 161
You need to configure budget planning for Alpine Ski House Corporate.
Which two components should you configure? Each correct answer presents part of the solution.
NOTE: Each correct selection is worth one point.
A. budget control workflow
B. budget planning hierarchy
C. organizational hierarchy
D. operational budget register entry
E. budget planning workflow
Show Answer
Correct Answer: B, E
Explanation: Budget planning requires defining how budgets are structured and rolled up, which is done through the budget planning hierarchy. It also requires managing submission and approval of budgets, which is handled by the budget planning workflow. Organizational hierarchies and operational budget registers are not sufficient on their own, and budget control workflow applies to budget control, not planning.
Question 162
HOTSPOT -
A company is implementing Microsoft Dynamics 365 Finance. The company plans to implement the Fixed asset module.
You have the following requirements:
✑ Post transactions to the tax depreciation book at the same interval as the primary book.
✑ Tax transactions must be journalized without being recorded in the general ledger.
You need to configure the fixed asset books.
Which configuration option should you use? To answer, drag the appropriate configurations to the correct requirements. Each configuration may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content.
NOTE: Each correct selection is worth one point.
Select and Place:
Show Answer
Correct Answer: Post transactions to the tax depreciation book at the same interval as the primary book.
Derived
Tax transactions must be journalized without being recorded in the general ledger.
Posting layer
Explanation: A derived book inherits the posting interval from the primary book, ensuring depreciation is posted at the same frequency. Using a posting layer allows tax transactions to be journalized on a separate layer that does not affect the general ledger balances.
Question 163
A company uses Dynamics 365 Finance. The company is based in the United States and sells a product online. The product is shipped to the United States,
Canada, and Mexico. The product is sourced from Brazil.
Legal entities must be set up for each country/region. One ledger account must be used to track sales tax payable.
You need to configure the system to track Use Tax.
Which two parameters should you configure? Each correct answer presents part of the solution.
NOTE: Each correct selection is worth one point.
A. single sales tax code for Brazil
B. ledger posting group
C. single sales tax code for the United States
D. taxation rule
E. tax code for each legal entity
Show Answer
Correct Answer: B, E
Explanation: Use Tax in Dynamics 365 Finance is controlled primarily through tax codes and their posting configuration. A ledger posting group is required to ensure all sales/use tax amounts are posted to a single sales tax payable ledger account across legal entities. In addition, Use Tax is enabled via a checkbox on the tax code, and because tax codes are company-specific, a tax code must be configured for each legal entity to track Use Tax correctly. Taxation rules or single tax codes per country are not required to specifically enable Use Tax.
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