Microsoft MB-310 Exam Dumps & Practice Test Questions

Question 1:

You are a Dynamics 365 Finance consultant implementing the accounts payable module. A company wants to ensure that all vendor invoices above $10,000 require approval before payment. 

Which configuration should you set up to meet this requirement?

A Vendor posting profile
B Approval workflows
C Payment journal setup
D Vendor groups

Answer: B

Explanation:

The MB-310 exam focuses heavily on configuring and managing core finance operations in Dynamics 365 Finance, including accounts payable, general ledger, and more. One common business requirement is controlling payments through approval workflows.

Option B, Approval workflows, is the correct answer because Dynamics 365 Finance allows organizations to define approval workflows for various business processes, including vendor invoice approvals. These workflows can be configured to enforce conditions such as invoice amount thresholds—like requiring approval for any invoice above $10,000. The system routes invoices automatically to designated approvers, ensuring control and compliance before payments are processed.

Option A, Vendor posting profile, relates to how transactions are posted to ledger accounts but doesn’t control invoice approval. It configures accounting setups but not workflow or approval processes.

Option C, Payment journal setup, deals with payment processing steps such as payment methods and bank accounts but does not enforce approval for invoices before payment.

Option D, Vendor groups, organizes vendors into categories for pricing or reporting but does not manage invoice approvals.

Therefore, the right approach for ensuring invoices above a certain amount are reviewed before payment is to configure approval workflows that can be customized with conditions and assigned approvers. This functionality enhances control over vendor payments and reduces the risk of unauthorized transactions.

Question 2:

A company using Dynamics 365 Finance wants to allocate overhead costs to various departments based on labor hours reported. 

Which feature in Dynamics 365 Finance should be used to achieve this?

A Fixed asset depreciation
B Cost accounting ledger
C Overhead cost allocation rules
D Inventory valuation

Answer: C

Explanation:

Cost allocation is a vital part of financial management in Dynamics 365 Finance, enabling organizations to distribute indirect expenses such as overhead to various cost centers or departments based on allocation bases like labor hours.

Option C, Overhead cost allocation rules, is the correct feature for this scenario. Dynamics 365 Finance provides functionality to define overhead cost allocation rules, where overhead costs can be allocated using bases such as labor hours, machine hours, or any other measurable activity driver. This ensures more accurate costing by reflecting the actual resource consumption by each department or cost center.

Option A, Fixed asset depreciation, refers to the systematic allocation of the cost of fixed assets over their useful life and does not relate to overhead allocation.

Option B, Cost accounting ledger, is part of the broader cost accounting setup, which supports tracking and analysis of costs, but on its own, it is not the mechanism for allocating overhead.

Option D, Inventory valuation, concerns assigning costs to inventory items, and is unrelated to allocating overhead costs to departments.

Thus, when a company needs to allocate overhead expenses based on labor hours reported by departments, they must configure overhead cost allocation rules within Dynamics 365 Finance. This feature ensures the financial statements accurately reflect departmental expenses and profitability, supporting better management decision-making.

Question 3:

A company needs to set up a budget control process in Dynamics 365 Finance to prevent overspending. They want transactions that exceed the budget to be blocked automatically. 

Which budgeting feature should be enabled to enforce this?

A Budget planning workflow
B Budget control with budget checks
C Budget register entries
D Commitment control without workflow

Answer: B

Explanation:

In Microsoft Dynamics 365 Finance, budgeting and budget control are essential features to ensure organizations do not exceed their financial plans. For the MB-310 exam, understanding how to configure budget control to enforce spending limits is critical.

Option B, Budget control with budget checks, is the correct choice because it enables automatic enforcement of budget limits. When budget control is activated, the system performs real-time checks during transaction entry—such as purchase orders, vendor invoices, or journal entries—against the approved budget amounts. If a transaction exceeds the budgeted amount, the system can block it, preventing overspending.

This is the most direct method to ensure transactions do not surpass budget constraints, helping organizations maintain fiscal discipline and meet financial goals.

Option A, Budget planning workflow, refers to the approval process for budget proposals but does not enforce controls during actual spending transactions.

Option C, Budget register entries, are records of budget transactions in the system, used for budget adjustments or transfers, but on their own, they do not prevent overspending.

Option D, Commitment control without workflow, allows budget checking but does not include approval workflows. However, it does not explicitly guarantee blocking transactions; depending on configuration, it may only warn users.

Therefore, to meet the company’s requirement of automatically blocking transactions that exceed the budget, enabling budget control with budget checks is the best solution. This ensures budget compliance by controlling expenditures directly within Dynamics 365 Finance transactions, an essential function covered

Question 4:

A company is preparing to close its financial year using the general ledger module in Dynamics 365 Finance. The finance team wants to ensure the system is correctly configured to complete the year-end close, set up for the next fiscal year, and manage accounts properly.

Which three configuration steps should you carry out in the general ledger module to ensure a smooth and accurate year-end closing process? (Select three.)

A. Set fiscal year close parameters
B. Configure the ledger calendar for the upcoming fiscal year
C. Establish a year-end close template
D. Verify main account types
E. Create the next fiscal year

Correct Answer: A, B, C

Explanation:

Closing the fiscal year efficiently in Dynamics 365 Finance requires careful preparation of several critical configurations to avoid errors and ensure financial accuracy. The three key steps you must take are: setting fiscal year close parameters, configuring the ledger calendar, and establishing a year-end close template.

A. Set Fiscal Year Close Parameters
This configuration is fundamental because it directs how the system will handle the year-end closing process. Parameters include defining how profit and loss accounts are closed and transferred to retained earnings, specifying which fiscal periods to close, and setting rules for financial adjustments before the final close. Without correctly setting these parameters, the system might fail to post necessary closing entries, resulting in incomplete or inaccurate financial data.

B. Configure the Ledger Calendar for the Upcoming Fiscal Year
The ledger calendar manages fiscal periods and defines their start and end dates. By updating the ledger calendar for the new fiscal year, the system recognizes which transactions belong to the previous year and which will be recorded in the new one. This clarity prevents errors during posting, ensuring transactions after the close are properly recorded in the correct fiscal year.

C. Establish a Year-End Close Template
The year-end close template automates recurring closing processes by specifying rules for how balances are transferred and how accounts, especially profit and loss accounts, are settled and rolled forward. Using a template ensures consistency and reduces manual errors, which is especially important for organizations with multiple legal entities or complex accounting structures.

Why Not D or E?
While validating main account types (D) is good practice for overall ledger management, it doesn’t directly affect the year-end close process. Creating the next fiscal year (E) is a routine task in financial setup but isn’t strictly part of closing the current fiscal year since the ledger calendar setup already covers it.

By focusing on these three configuration actions, you ensure a seamless transition from one fiscal year to the next, maintain the integrity of financial data, and uphold compliance with accounting standards within Dynamics 365 Finance.

Question 5:

A client has complex accounting rules requiring specific posting definitions in Dynamics 365 Finance to ensure transactions are recorded according to their standards.

In which scenario should posting definitions be applied?

A. When financial dimensions should default from the vendor record to an invoice
B. When only certain financial dimensions are permitted with specific main account combinations
C. When multiple balanced ledger entries are created based on transaction types or accounts
D. When transactions need to automatically post to accounts receivable upon invoice posting

Correct Answer: B

Explanation:

Posting definitions in Dynamics 365 Finance are rules that control how and when accounting entries are made based on the combinations of accounts and financial dimensions. They are critical when enforcing strict accounting policies, especially when only certain combinations of financial dimensions are valid with particular main accounts.

Why Option B is Correct:
When a client’s business requires that only specific financial dimensions (like cost centers, departments, or projects) can be posted with certain main accounts, posting definitions become essential. These definitions prevent invalid postings by restricting which dimension-account combinations are allowed, ensuring the accuracy and integrity of financial data. For example, you might want to prevent a certain main account from being used with a particular department dimension if that’s not allowed under the client’s accounting policies. Posting definitions enforce such business rules efficiently.

Why the Other Options Are Incorrect:

• Option A: Defaulting financial dimensions from the vendor record to an invoice is about setting defaults for data entry, which is managed by dimension defaulting rules or vendor master data setup. Posting definitions control how postings happen after the transaction, not the defaulting process.

• Option C: While posting definitions can influence ledger entries, creating multiple balanced ledger entries based on transaction types or accounts is typically handled by posting profiles or journal configurations. Posting definitions focus more on controlling valid dimension-account combinations rather than balancing entries.

• Option D: Automatic posting to accounts receivable when invoices are posted is controlled by posting profiles, not posting definitions. Posting profiles define where system-generated transactions are posted. Posting definitions control conditional posting rules rather than default posting accounts.

In summary, posting definitions are vital tools for enforcing dimension-account combination rules within the posting process. This makes option B the best choice, as it directly relates to restricting which financial dimensions can post with specific main accounts, ensuring compliance with client accounting requirements.

Question 6:

An organization is setting up cost accounting in Dynamics 365 Finance and needs to configure fiscal calendars. 

What are three valid purposes of fiscal calendars within Dynamics 365 Finance? Select all that apply.

A Standard work hours
B Financial transactions
C Fixed asset depreciation
D Budget cycles
E Shift work hours

Answer: B, C, D

Explanation:

Fiscal calendars in Dynamics 365 Finance are essential tools that help define the structure of the organization’s financial periods. They divide the financial year into specific intervals—months, quarters, or years—that form the backbone for many financial operations.

B. Financial transactions: Every financial transaction in Dynamics 365 must be posted within a valid fiscal period. Fiscal calendars ensure that transactions such as invoices, journal entries, and payments are properly allocated to the correct period. This alignment is crucial for accurate financial reporting, auditing, and tax compliance.

C. Fixed asset depreciation: Depreciation calculations depend on defined financial periods. The fiscal calendar establishes when depreciation should be posted—monthly, quarterly, or yearly—ensuring that asset values are reduced consistently and in alignment with financial statements.

D. Budget cycles: Budgeting requires clearly defined time frames for planning and control. Fiscal calendars provide the framework to create budget cycles, enabling organizations to set budgets and monitor expenditures within defined periods. This allows meaningful variance analysis and effective budget management.

Why not the others?

A. Standard work hours and E. Shift work hours relate to workforce management and scheduling, handled by HR or time management modules. They are unrelated to the fiscal calendar, which focuses strictly on financial periods and reporting.

In summary, fiscal calendars are a foundation for managing financial transactions, scheduling fixed asset depreciation, and structuring budget cycles in Dynamics 365 Finance. Proper setup is critical for ensuring accuracy and compliance in financial processes, making B, C, and D the correct answers.

Question 7:

A company uses multiple bank accounts and wants to automate bank reconciliation by importing electronic bank statements in Dynamics 365 Finance. 

Which three steps are required to correctly import these bank statements? Select all that apply.

A Select all bank accounts for the bank statement files and upload all files at once
B Select Account reconciliation on the bank account form
C Import bank statements from the Data Management workspace
D Navigate to Import statement on the Bank Statements page under Cash and Bank Management
E Use Import statement for multiple bank accounts across legal entities by uploading a zip file

Answer: C, D, E

Explanation:

To leverage automatic bank reconciliation in Dynamics 365 Finance, the company must correctly import electronic bank statements. The platform supports various methods for importing statements to ensure transactions are matched and reconciled efficiently.

C. Import bank statements from the Data Management workspace: The Data Management workspace is designed for handling bulk data imports and exports. Importing bank statements here ensures that files conform to the expected formats and that data flows seamlessly into the system for reconciliation processing.

D. Navigate to Import statement on the Bank Statements page of Cash and Bank Management: This page allows users to import individual bank statements directly, facilitating the reconciliation process by linking the statement data with internal ledger entries.

E. Use Import statement for multiple bank accounts in all legal entities by uploading a zip file: For organizations managing multiple bank accounts across legal entities, importing a zipped collection of bank statements streamlines the process. This bulk import functionality reduces manual effort and ensures all accounts are reconciled timely.

Why not the others?

A. Selecting all bank accounts and uploading all files simultaneously is not supported because Dynamics 365 Finance requires structured imports either individually or as zip files organized by accounts and entities.

B. Selecting Account reconciliation on the bank account form prepares the reconciliation process but does not itself import bank statements.

In conclusion, correctly importing electronic bank statements involves using the Data Management workspace, importing through the Bank Statements page, or uploading zip files for multiple accounts. These steps ensure accurate, efficient reconciliation, making C, D, and E the correct selections.

Question 8:

A company wants to establish an allocation rule to distribute overhead utility expenses among multiple departments. The rule should specify the exact proportions and criteria for allocating the source expense amounts to the destination departments, ensuring the distribution accurately reflects how utility costs are shared.

Which allocation method should be chosen to fulfill the requirement of:

A. Distribute the source document amount equally
B. Fixed weight
C. Equally
D. Basis

Correct Answer: D

Explanation:

When setting up allocation rules in Dynamics 365 Finance, the chosen allocation method is critical for ensuring expenses are distributed properly and according to the company’s specific business rules. The company wants to allocate overhead utility costs to various departments, not equally or arbitrarily, but based on certain proportions or criteria that reflect actual usage or responsibility.

Why the Basis Method (Option D) is Correct:
The Basis allocation method is specifically designed for situations where allocation needs to be proportional or based on measurable criteria. This method allows you to define the basis on which costs are allocated—for example, square footage, headcount, machine hours, or revenue percentage per department. This flexibility makes the Basis method ideal for overhead utility expenses because utility consumption often varies by department size, activity, or other measurable factors.

For example, if Department A occupies 40% of the building’s total square footage and Department B occupies 60%, the Basis method can allocate utility expenses proportionally (40% and 60%). This method ensures the overhead costs are distributed in a way that realistically reflects the departments’ actual consumption or responsibility for the utilities.

Why Other Options Are Less Suitable:

• A. Distribute the source document amount equally:
  This method spreads the expense evenly among all departments regardless of any actual usage or criteria. While simple, it does not consider differences in department size or utility consumption, leading to inaccurate allocations that might unfairly charge some departments.

• B. Fixed Weight:
  This option allocates costs based on predetermined weights or percentages that remain constant. Although useful in some scenarios, it lacks the flexibility of the Basis method. Fixed weights may not reflect changing circumstances like fluctuating department sizes or varying utility usage over time.

• C. Equally:
  Similar to option A, this method divides the expense evenly among all destination lines. It is straightforward but does not account for the proportional or criteria-based allocation that the company requires.

The Basis method provides the most accurate and flexible way to allocate overhead utility expenses because it allows the allocation to be driven by relevant and measurable criteria that reflect real consumption or responsibility. This ensures fair and precise cost distribution among departments, meeting the company’s need to define how and in what proportion the expenses should be shared. Therefore, choosing the Basis allocation method aligns perfectly with the requirement for proportional and criteria-based allocation of overhead utility expenses.

Question 9:

Which of the following features in Dynamics 365 Finance and Operations primarily helps automate the process of matching vendor invoices with purchase orders and receipts to ensure accurate payments?

A. Invoice matching

B. Vendor collaboration

C. Purchase requisition

D. Payment journal

Explanation:

In the context of the MB-310 exam (Microsoft Dynamics 365 Finance), understanding how the system automates and controls vendor invoice processing is critical. The feature that directly addresses the automation of matching vendor invoices with purchase orders and receipts is called Invoice matching. This function plays a pivotal role in ensuring that payments made to vendors are both accurate and compliant with agreed terms.

When an organization purchases goods or services, it typically generates a purchase order (PO). Once the goods or services are received, a receipt record is created. Vendors then submit invoices requesting payment. The system’s invoice matching feature compares the invoice details against the original purchase order and the receipt. This comparison helps identify discrepancies such as incorrect quantities or pricing before payment is made.

Vendor collaboration (option B) involves working directly with vendors through portals or communication tools but does not specifically automate invoice matching. Purchase requisition (option C) is a process to request goods or services before a purchase order is created. This stage happens earlier in the procurement cycle and does not handle invoice verification. Payment journal (option D) is a ledger where payments are recorded but does not perform matching or verification functions.

The correct feature—invoice matching—is essential for reducing errors, preventing fraud, and ensuring compliance with company policies. It also improves vendor relationships by ensuring timely and correct payments, thereby reducing disputes.

This concept is fundamental to the MB-310 exam as it tests your ability to configure and manage accounts payable processes within Dynamics 365 Finance, including how to leverage automation to streamline vendor invoice processing.

Question 10:

In Dynamics 365 Finance, which of the following best describes the purpose of setting up a Fixed Asset Posting Profile?

A. To control how financial transactions related to fixed assets are posted to the general ledger

B. To track the physical location of fixed assets within the company

C. To assign depreciation methods to fixed assets

D. To generate fixed asset purchase orders automatically

Explanation:

A key area tested in the MB-310 exam is the management of fixed assets within Dynamics 365 Finance. Fixed assets represent long-term tangible property owned by a company, such as machinery, vehicles, or buildings. Managing these assets properly includes tracking acquisition costs, depreciation, and disposals, and ensuring that financial transactions related to them are accurately posted.

The Fixed Asset Posting Profile (option A) is a configuration element in Dynamics 365 Finance that defines how transactions involving fixed assets are posted into the general ledger (GL). It controls the ledger accounts affected by transactions such as acquisitions, depreciation, adjustments, and disposals. Proper setup ensures that financial reports reflect the accurate financial position of the company regarding fixed assets.

Option B refers to physical asset tracking, which is typically handled through asset tags and location management, not posting profiles. Option C, assigning depreciation methods, is a separate setup called depreciation profiles or books, which governs how depreciation calculations are done, but not how postings are made to the ledger. Option D concerns purchase order automation, which is unrelated to fixed asset posting profiles.

Understanding posting profiles is essential because incorrect configurations can lead to inaccurate financial statements and non-compliance with accounting standards. For the MB-310 exam, you must know how to configure fixed asset posting profiles to integrate fixed asset transactions seamlessly with the GL, ensuring data integrity and proper financial controls.

This knowledge directly supports key exam objectives around configuring and managing fixed asset accounting in Dynamics 365 Finance.