MB-920: Microsoft Dynamics 365 Fundamentals (ERP) Practice Exam
The MB-920 Microsoft Dynamics 365 Fundamentals (ERP) exam is designed for professionals seeking foundational knowledge of Microsoft Dynamics 365 enterprise resource planning (ERP) applications. This certification validates your understanding of core ERP concepts, including finance, supply chain management, manufacturing, and business process automation within the Dynamics 365 ecosystem.
What is the MB-920 Certification?
This Microsoft certification is ideal for individuals who want to demonstrate their grasp of Dynamics 365 ERP modules and services. Whether you are an aspiring ERP consultant, business analyst, or IT professional, the MB-920 exam offers essential insights into how Dynamics 365 supports business operations and digital transformation.
What You Will Learn
Preparing for the MB-920 exam will help you:
Understand the basics of Dynamics 365 Finance and Supply Chain Management applications.
Explore key ERP concepts such as procurement, inventory management, budgeting, and fixed assets.
Gain insights into business process automation using workflows and electronic reporting.
Learn how to analyze financial data and generate reports using Power BI integration.
Familiarize yourself with cloud deployment benefits and Microsoft’s ecosystem tools like Power Automate and Power Apps.
Core Topics Covered
This practice exam thoroughly covers critical topics, including:
Dynamics 365 Finance functionalities: General ledger, accounts payable, accounts receivable, and budgeting.
Supply chain management essentials: Warehouse operations, procurement, product information management.
Business process automation: Workflow configuration, business events, and electronic document handling.
Integration and reporting: Dual-write, Power BI dashboards, and Azure AI insights.
Security and compliance: Role-based security, data protection, and regulatory reporting.
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At Exam Sage, we provide expertly crafted practice tests that mimic the real MB-920 exam environment. Our materials are:
Regularly updated to reflect the latest Microsoft Dynamics 365 exam objectives.
Designed with detailed explanations for every question, enhancing your conceptual understanding.
Crafted to boost confidence, improve speed, and identify knowledge gaps.
Available instantly online, accessible anywhere to fit your study schedule.
With Exam Sage’s MB-920 practice exam, you gain a reliable, convenient, and comprehensive study tool that significantly increases your chances of success.
Sample Questions and Answers
1. Which Microsoft Dynamics 365 application is primarily used for financial management?
A. Dynamics 365 Sales
B. Dynamics 365 Finance
C. Dynamics 365 Commerce
D. Dynamics 365 Project Operations
Answer: B. Dynamics 365 Finance
Explanation: Dynamics 365 Finance focuses on financial management, including budgeting, forecasting, and financial reporting.
2. What is the main function of Dynamics 365 Supply Chain Management?
A. Tracking employee performance
B. Managing customer service interactions
C. Optimizing production and inventory processes
D. Handling marketing automation
Answer: C. Optimizing production and inventory processes
Explanation: Supply Chain Management helps organizations manage logistics, manufacturing, and inventory.
3. Which of the following is a benefit of using Dynamics 365 in the cloud?
A. Requires more IT infrastructure
B. Manual software updates
C. Lower scalability
D. High availability and disaster recovery
Answer: D. High availability and disaster recovery
Explanation: Cloud-hosted Dynamics 365 solutions provide built-in redundancy, high availability, and disaster recovery options.
4. Which module is best suited for managing accounts payable and receivable?
A. Dynamics 365 Human Resources
B. Dynamics 365 Project Operations
C. Dynamics 365 Finance
D. Dynamics 365 Marketing
Answer: C. Dynamics 365 Finance
Explanation: The Finance module includes functionalities for managing payables and receivables.
5. Which Dynamics 365 app is designed to manage retail operations like POS and e-commerce?
A. Dynamics 365 Marketing
B. Dynamics 365 Commerce
C. Dynamics 365 Business Central
D. Dynamics 365 Field Service
Answer: B. Dynamics 365 Commerce
Explanation: Commerce helps businesses unify back-office, in-store, and digital shopping experiences.
6. What does ERP stand for in the context of Dynamics 365?
A. Enterprise Risk Planning
B. Enterprise Resource Planning
C. Electronic Resource Processing
D. Enterprise Revenue Platform
Answer: B. Enterprise Resource Planning
Explanation: ERP stands for Enterprise Resource Planning, focusing on core business processes like finance, manufacturing, and HR.
7. Which tool in the Microsoft ecosystem enables data visualization and dashboard creation from ERP data?
A. Excel
B. Microsoft Word
C. Power BI
D. SharePoint
Answer: C. Power BI
Explanation: Power BI integrates with Dynamics 365 to allow real-time data visualization and analytics.
8. What is a key benefit of using Dynamics 365 Business Central for SMBs?
A. High customization complexity
B. Built for large-scale enterprises only
C. Simplified, all-in-one business solution
D. Requires separate CRM integration
Answer: C. Simplified, all-in-one business solution
Explanation: Business Central is tailored for small to medium-sized businesses offering a unified solution for financials, sales, and operations.
9. Which of the following best describes Dynamics 365 Human Resources?
A. Manages customer service tickets
B. Tracks project accounting
C. Handles employee records and payroll
D. Automates lead generation
Answer: C. Handles employee records and payroll
Explanation: Human Resources in Dynamics 365 manages employee data, benefits, leave, and payroll integrations.
10. Dynamics 365 Project Operations combines capabilities from which modules?
A. Finance and Sales
B. Marketing and Commerce
C. Project Service Automation and Project Management
D. Customer Insights and Field Service
Answer: C. Project Service Automation and Project Management
Explanation: Project Operations integrates project planning, resource management, and billing.
11. Which Microsoft platform supports custom business app development for Dynamics 365?
A. Microsoft Outlook
B. Power Platform
C. Microsoft Teams
D. OneNote
Answer: B. Power Platform
Explanation: The Power Platform (Power Apps, Power Automate, etc.) extends and customizes Dynamics 365 apps.
12. Which Dynamics 365 product is best for managing service-based interactions like repairs and field visits?
A. Dynamics 365 Sales
B. Dynamics 365 Field Service
C. Dynamics 365 Marketing
D. Dynamics 365 Commerce
Answer: B. Dynamics 365 Field Service
Explanation: Field Service helps businesses manage work orders, schedules, and remote service delivery.
13. What is dual-write in Dynamics 365 integration?
A. Writing code in two languages
B. Writing data to backup servers
C. Synchronizing data between Finance and Dataverse
D. Encrypting data twice
Answer: C. Synchronizing data between Finance and Dataverse
Explanation: Dual-write enables real-time data synchronization between Dynamics 365 Finance & Operations and Dataverse.
14. What is the function of Microsoft Dataverse in relation to Dynamics 365?
A. Cloud storage for backups
B. Reporting engine
C. Data integration and standardization layer
D. Email automation platform
Answer: C. Data integration and standardization layer
Explanation: Dataverse is the underlying data platform used to unify data across applications in Dynamics 365 and Power Platform.
15. Which capability is part of Dynamics 365 Marketing?
A. Timesheet entry
B. Payroll management
C. Customer journey mapping
D. Vendor management
Answer: C. Customer journey mapping
Explanation: Marketing enables businesses to design and automate personalized customer journeys.
16. Which ERP solution is designed for rapid deployment and ease of use for SMBs?
A. Dynamics 365 Finance
B. Dynamics 365 Business Central
C. Dynamics 365 Supply Chain Management
D. Dynamics 365 Project Operations
Answer: B. Dynamics 365 Business Central
Explanation: Business Central offers a comprehensive, easy-to-use ERP solution for small and medium-sized businesses.
17. What does Dynamics 365 Finance automate in business processes?
A. CRM
B. Budgeting and financial reporting
C. Marketing emails
D. Customer ticketing
Answer: B. Budgeting and financial reporting
Explanation: The Finance module streamlines financial processes such as budgeting, AP/AR, and forecasting.
18. Which product allows you to create automated workflows across Dynamics 365 and other services?
A. Power Automate
B. Power Virtual Agents
C. Power BI
D. Dynamics 365 Remote Assist
Answer: A. Power Automate
Explanation: Power Automate enables automated workflows between services to improve productivity.
19. Dynamics 365 Sales is part of which broader solution category?
A. ERP
B. SCM
C. CRM
D. BI
Answer: C. CRM
Explanation: Sales is part of the Customer Relationship Management suite in Dynamics 365.
20. What is a key differentiator of Dynamics 365 compared to legacy ERP systems?
A. On-premise only
B. Lack of updates
C. AI-powered insights and cloud integration
D. No mobile support
Answer: C. AI-powered insights and cloud integration
Explanation: Dynamics 365 combines ERP, CRM, and AI with full cloud capabilities and regular updates.
21. Which Dynamics 365 feature enables forecasting of financial performance?
A. Project tracking
B. Asset management
C. Budget planning
D. Payment journals
Answer: C. Budget planning
Explanation: Budget planning tools allow users to create, manage, and monitor financial forecasts.
22. What is a benefit of integrating Microsoft Teams with Dynamics 365?
A. Enables printing invoices
B. Enhances collaboration and real-time data sharing
C. Replaces CRM functionality
D. Adds BI dashboard features
Answer: B. Enhances collaboration and real-time data sharing
Explanation: Teams integration enables contextual collaboration around Dynamics 365 records.
23. Which Dynamics 365 ERP app would you use to manage warehouse and transportation logistics?
A. Dynamics 365 Finance
B. Dynamics 365 Sales
C. Dynamics 365 Supply Chain Management
D. Dynamics 365 Project Operations
Answer: C. Dynamics 365 Supply Chain Management
Explanation: This app provides capabilities for managing warehouse operations, logistics, and transportation.
24. What is the benefit of using Power Apps with Dynamics 365 ERP?
A. Makes reporting faster only
B. Allows creation of custom apps with low-code/no-code
C. Replaces financial modules
D. Works only with CRM
Answer: B. Allows creation of custom apps with low-code/no-code
Explanation: Power Apps allows users to build custom apps that connect to ERP data with minimal coding.
25. What feature in Dynamics 365 Finance helps manage currency conversions?
A. Project ledger
B. Exchange rate type setup
C. Customer segmentation
D. Fixed asset book
Answer: B. Exchange rate type setup
Explanation: This setup allows for automatic and manual management of currency exchange rates.
26. Which cloud model does Dynamics 365 use?
A. Private cloud only
B. On-premise only
C. SaaS (Software as a Service)
D. PaaS only
Answer: C. SaaS (Software as a Service)
Explanation: Dynamics 365 is delivered as SaaS, providing accessibility through the cloud with regular updates.
27. What is one key outcome of financial period closing in Dynamics 365 Finance?
A. Opens new inventory locations
B. Closes projects
C. Generates final reports for a fiscal period
D. Deletes financial data
Answer: C. Generates final reports for a fiscal period
Explanation: Closing periods allows businesses to finalize financial entries and generate reports.
28. What is a fiscal calendar in Dynamics 365?
A. A marketing timeline
B. A project schedule
C. A structured accounting period setup
D. A retail planning chart
Answer: C. A structured accounting period setup
Explanation: Fiscal calendars define periods and years for financial transactions and reporting.
29. What does Dynamics 365 Business Central automate for small businesses?
A. Email marketing
B. Financial management, inventory, and sales
C. Network security
D. Data warehousing
Answer: B. Financial management, inventory, and sales
Explanation: Business Central automates and integrates key functions for small to medium-sized enterprises.
30. Which role is most likely to use Dynamics 365 Finance?
A. Marketing Coordinator
B. Field Technician
C. Financial Controller
D. Retail Store Manager
Answer: C. Financial Controller
Explanation: Financial Controllers rely on Dynamics 365 Finance for oversight of budgeting, accounting, and financial reporting.
31. Which feature in Dynamics 365 Finance helps automate the vendor invoice approval process?
A. Workflow engine
B. Dual-write integration
C. Customer segmentation
D. Retail POS setup
✅ Answer: A
Explanation:
The workflow engine in Dynamics 365 Finance allows automation of business processes, including vendor invoice approvals.
32. Which Dynamics 365 application would you use to manage product availability across multiple retail locations?
A. Dynamics 365 Sales
B. Dynamics 365 Customer Insights
C. Dynamics 365 Commerce
D. Dynamics 365 Project Operations
✅ Answer: C
Explanation:
Dynamics 365 Commerce enables inventory visibility and availability across stores, warehouses, and online channels.
33. In Dynamics 365 Supply Chain Management, what is a production order used for?
A. Assigning tasks to sales agents
B. Managing hiring schedules
C. Planning and executing manufacturing
D. Organizing financial reports
✅ Answer: C
Explanation:
A production order in Supply Chain Management defines and controls manufacturing processes and scheduling.
34. What is a key benefit of using Microsoft Power Platform with Dynamics 365 ERP apps?
A. Social media integration
B. Personal productivity tools
C. Extending and customizing business logic
D. Employee engagement analytics
✅ Answer: C
Explanation:
The Power Platform (Power BI, Power Automate, Power Apps) allows businesses to extend, customize, and automate Dynamics 365 ERP apps.
35. Which application is specifically designed to unify financials and operations for large enterprises?
A. Dynamics 365 Business Central
B. Dynamics 365 Finance
C. Dynamics 365 Marketing
D. Dynamics 365 Sales
✅ Answer: B
Explanation:
Dynamics 365 Finance offers comprehensive financial capabilities ideal for large organizations with complex needs.
36. What role does Microsoft Dataverse play in the Dynamics 365 ecosystem?
A. Storing Outlook messages
B. Hosting PowerPoint templates
C. Unified data platform for apps
D. Running SQL queries on-premises
✅ Answer: C
Explanation:
Microsoft Dataverse acts as a common data platform, connecting data across Dynamics 365 apps, Power Platform, and custom apps.
37. Which of the following is a feature in Dynamics 365 Business Central for cash flow prediction?
A. Inventory adjustment
B. Sales forecasting
C. Cash Flow Forecast
D. Vendor payment run
✅ Answer: C
Explanation:
Cash Flow Forecast in Business Central uses historical and projected data to predict future cash positions.
38. What allows users to extend Dynamics 365 without writing code?
A. Azure SQL Database
B. X++ language
C. Power Apps
D. JavaScript SDK
✅ Answer: C
Explanation:
Power Apps enables users to build apps and extend Dynamics 365 without coding, using low-code/no-code tools.
39. Which feature of Dynamics 365 enables users to analyze financial performance?
A. Customer Service Hub
B. Financial Reporting
C. Field Service Analytics
D. Retail Statement Generator
✅ Answer: B
Explanation:
Financial Reporting allows companies to generate and analyze balance sheets, income statements, and other financial data.
40. What is a benefit of using Lifecycle Services (LCS)?
A. Daily backup creation
B. Social listening automation
C. Project lifecycle management
D. Customer order tracking
✅ Answer: C
Explanation:
LCS helps partners and customers manage the implementation, testing, and maintenance of Dynamics 365 ERP solutions.
41. Which ERP module helps companies handle returns and refunds in a retail environment?
A. Payroll
B. Returns management
C. Human Resources
D. Project accounting
✅ Answer: B
Explanation:
Returns management supports customer returns, restocking, and refund processing, especially in retail scenarios.
42. How does Dynamics 365 ERP support compliance?
A. By automating marketing emails
B. By implementing AI in Power BI
C. Through audit trails and security roles
D. By integrating with GitHub
✅ Answer: C
Explanation:
Compliance is ensured using audit logs, role-based security, and regulatory configurations.
43. What is the function of a purchase order in Dynamics 365?
A. To track inbound emails
B. To request goods or services from vendors
C. To schedule employee training
D. To segment customers
✅ Answer: B
Explanation:
Purchase orders are used to request and manage goods or services from external suppliers.
44. What type of deployment does Dynamics 365 Finance support?
A. On-premises only
B. Cloud only
C. Hybrid and cloud
D. Mobile only
✅ Answer: C
Explanation:
Dynamics 365 Finance supports both cloud and hybrid deployments for flexible infrastructure needs.
45. What does the Inventory module in Supply Chain Management allow users to do?
A. Post journal entries
B. Run marketing campaigns
C. Track stock levels across warehouses
D. Customize customer emails
✅ Answer: C
Explanation:
The inventory module provides tools to manage and track stock across various locations in real time.
46. In which scenario would you use Dynamics 365 Project Operations?
A. Launching an e-commerce platform
B. Managing retail customer loyalty
C. Delivering billable client services
D. Onboarding new employees
✅ Answer: C
Explanation:
Project Operations helps plan, execute, and manage projects with time tracking, billing, and resource planning.
47. Which Dynamics 365 feature allows users to define payment terms with vendors?
A. Trade agreements
B. Payment journals
C. Vendor payment schedules
D. Terms of payment
✅ Answer: D
Explanation:
Terms of payment define the conditions under which payments must be made, such as net 30 or cash on delivery.
48. What is the benefit of integrating Dynamics 365 with Microsoft Teams?
A. Track app performance
B. Reduce financial risk
C. Improve collaboration on business records
D. Generate payroll reports
✅ Answer: C
Explanation:
Integrating with Teams allows users to view and collaborate on Dynamics 365 records in real-time within chat or meetings.
49. Which Dynamics 365 tool is used to forecast demand and optimize replenishment?
A. Demand Forecasting
B. Budget Planning
C. Customer Voice
D. Power Virtual Agents
✅ Answer: A
Explanation:
Demand Forecasting helps predict future demand using historical data and improves inventory planning.
50. Which component of Business Central helps users define workflows and approval hierarchies?
A. Approvals and Requests Module
B. Workflow Management
C. User Permissions Matrix
D. Notification Center
✅ Answer: B
Explanation:
Workflow Management in Business Central helps define rules for approvals and process automation.
