10 questions covering this official MB-310 domain.
Q01 - Question
A controller is reviewing which balance sheet items should be recorded and tracked in the Fixed assets module in Dynamics 365 Finance. Which item belongs in Fixed assets rather than being classified as a current asset?
Domain: Manage fixed assets Type: Single choice
- A. Merchandise inventory that is held for resale in the current period
- B. Customer invoices that are expected to be collected within 30 days
- C. A delivery van that the company will use in its operations over several years
- D. Prepaid insurance that is fully consumed within the current year
C is correct.
Explanation: Fixed assets are items of value that the organization holds and uses in operations over more than one accounting period, so the delivery van is tracked as a fixed asset and depreciated over its useful life.
A is incorrect: Merchandise held for resale is a current asset because it is expected to be converted to cash in the short term, and it is not depreciated as a fixed asset.
B is incorrect: Outstanding customer invoices are receivables, which are current assets managed in Accounts receivable, not capitalized assets.
D is incorrect: Prepaid insurance that is consumed within the current year is a current asset and is expensed as the coverage period passes, so no fixed asset record and book are required.
Q02 - Question
A company will add several hundred similar machines to Dynamics 365 Finance. Each machine must use the same depreciation setup so that new asset records do not have to be configured individually. Which approach uses the relationships between fixed assets components correctly?
Domain: Manage fixed assets Type: Single choice
- A. Assign each machine to a fixed asset group that already has the required books attached, so new assets inherit the book and depreciation setup.
- B. Create a separate fixed asset group for every machine so each asset can hold its own depreciation values.
- C. Enter the depreciation method and service life manually on each fixed asset record after it is created.
- D. Define the depreciation method on the fixed asset posting profile so it applies to all machines.
A is correct.
Explanation: The fixed asset group is the link between an asset and its books, so assets that are created in a group receive the books and the depreciation settings that are defined for that group. This keeps the setup consistent for large volumes of similar assets.
B is incorrect: Creating one group per asset removes the grouping benefit and multiplies the setup and maintenance work without changing how depreciation is calculated.
C is incorrect: Entering values on each asset record is possible but it is manual for every new machine and increases the risk of inconsistent depreciation settings.
D is incorrect: The fixed asset posting profile controls which main accounts are used when transactions post, not the depreciation method or service life.
Q03 - Question
An organization keeps one book for financial reporting and a second book with different depreciation values for tax reporting. When an acquisition is posted to the financial reporting book, the corresponding transaction must be posted to the tax book at the same time. What should you configure?
Domain: Manage fixed assets Type: Single choice
- A. Post a separate fixed asset journal to the tax book manually at the end of each period.
- B. Add both books to the same fixed asset group and rely on the depreciation proposal to post to each book.
- C. Use a single book and change its depreciation method before each period close.
- D. Configure the tax book as a derived book of the financial reporting book.
D is correct.
Explanation: Derived books let a transaction that is posted to the primary book post to the associated book at the same time, which is the setup used when a second book must carry different values for tax reporting.
A is incorrect: Manual journals for the tax book meet the values requirement but not the requirement that both books post together, and they add reconciliation work each period.
B is incorrect: Assigning both books to the fixed asset group makes both books available on the asset, but it does not cause a transaction on the primary book to post to the second book at the same time.
C is incorrect: A single book cannot hold two different sets of depreciation values, and changing the method repeatedly would overwrite the reporting basis instead of maintaining both.
Q04 - Question
A purchasing team buys capital equipment through purchase orders and vendor invoices. Accounting wants the fixed asset acquisition to be recorded from the purchase document instead of being entered again later. What should you do?
Domain: Manage fixed assets Type: Single choice
- A. Record the acquisition only in a fixed asset journal after the vendor invoice is posted.
- B. Enable fixed asset integration in Fixed assets parameters and reference the fixed asset or fixed asset group on the purchase order line.
- C. Post the equipment purchase to an expense account and reclassify it with a general journal at period end.
- D. Create a free text invoice for the equipment so the asset acquisition posts from Accounts receivable.
B is correct.
Explanation: Fixed assets integrates with procurement so that an acquisition can be created from the purchasing document. You enable the integration in Fixed assets parameters and identify the asset or asset group on the purchase order line.
A is incorrect: A separate fixed asset journal does record the acquisition, but it duplicates data entry and does not tie the acquisition to the purchase document as the team requires.
C is incorrect: Expensing the purchase and reclassifying later bypasses the acquisition transaction on the asset book, so the asset value and depreciation basis are not established when the purchase is posted.
D is incorrect: A free text invoice is a customer document in Accounts receivable and is not used to acquire equipment from a vendor purchase.
Q05 - Question
You are configuring fixed assets components in a new legal entity. Before users can create an asset and post an acquisition, which two configurations must be in place? Each correct answer presents part of the solution.
Domain: Manage fixed assets Type: Multiple choice
- A. A budget model that is reserved for capital expenditures
- B. Fixed asset groups with the required books assigned
- C. A recurring batch job for the depreciation proposal
- D. A fixed asset posting profile with main accounts for the acquisition transaction type
B and D are correct.
Explanation: Fixed asset groups with assigned books give each new asset its depreciation setup, and the fixed asset posting profile supplies the main accounts that the acquisition transaction posts to. Both must be configured before an acquisition can be posted.
A is incorrect: A budget model supports budgeting activity and is not a prerequisite for creating an asset record or posting an acquisition.
C is incorrect: The depreciation proposal is an ongoing operational task that runs after assets are acquired, so scheduling it does not enable the initial acquisition posting.
Q06 - Question
A company purchases production equipment that must be capitalized, depreciated over its useful life, and eventually disposed of, with all related postings reflected in the financial statements. Which functional area in Dynamics 365 Finance should you use to manage these assets?
Domain: Manage fixed assets Type: Single choice
- A. Accounts payable
- B. Cash and bank management
- C. Fixed assets
- D. Credit and collections
C is correct.
Explanation: Fixed assets is the area used to record capitalized assets and to manage their depreciation and disposal so that the related amounts are reflected in the financial statements.
A is incorrect: Accounts payable records the vendor invoice for the purchase and the payment to the vendor, but it does not maintain the asset value or depreciation over the asset life.
B is incorrect: Cash and bank management covers bank accounts and cash transactions, so it does not track asset depreciation or disposal.
D is incorrect: Credit and collections addresses customer credit and overdue balances and has no role in asset accounting.
Q07 - Question
A controller at Contoso is planning next year's capital expenditures. Several machines are approved for purchase but have not been acquired yet, and the controller wants these planned acquisitions reflected in the fixed asset plan in Dynamics 365 Finance. Which Fixed assets capability should the controller use?
Domain: Manage fixed assets Type: Single choice
- A. Transfer a fixed asset to move the planned amounts between assets
- B. Split a fixed asset to separate the planned amounts from acquired amounts
- C. Asset budgeting to record planned fixed asset amounts
- D. Recalculation of replacement costs and insured values for fixed asset groups
C is correct.
Explanation: Asset budgeting in Fixed assets is the feature used to record planned fixed asset amounts, so approved but unacquired machines can be represented in the fixed asset plan before acquisition transactions are posted.
A is incorrect: Transferring a fixed asset changes information on an asset that already exists in Fixed assets, so it cannot represent a purchase that has not happened.
B is incorrect: Splitting a fixed asset divides an existing asset record and does not create planned amounts.
D is incorrect: Recalculating replacement costs and insured values updates valuation fields on existing assets in a fixed asset group rather than recording planned acquisitions.
Q08 - Question
A forklift is reassigned from the Warehouse department to the Production department. The accountant must keep the existing asset number and its transaction history, but the asset must now be reported under the new department. Which action should the accountant take in Fixed assets?
Domain: Manage fixed assets Type: Single choice
- A. Transfer the fixed asset so it reflects the new department
- B. Split the fixed asset and assign the new part to Production
- C. Create a new fixed asset for Production and stop using the old asset
- D. Run the fixed assets roll forward report for the Production department
A is correct.
Explanation: Transferring a fixed asset is the task used to move an existing asset so that it is reported under different information, while the asset record and its history remain in place.
B is incorrect: Splitting a fixed asset creates a separate asset for a portion of the original, which is not needed when the whole forklift moves to one department.
C is incorrect: Creating a new asset would leave the acquisition and depreciation history on the old asset record and require the original asset to be maintained separately.
D is incorrect: The fixed assets roll forward report presents fixed asset balance information and does not change where an asset is reported.
Q09 - Question
An implementation team is configuring Fixed assets for a new legal entity. The team wants assets of the same type, such as vehicles, to be created with consistent default values instead of having each accountant enter values on every asset. What should the team configure first?
Domain: Manage fixed assets Type: Single choice
- A. Asset budgeting for the vehicle acquisitions
- B. The fixed assets roll forward report parameters
- C. A fixed asset split for each vehicle
- D. Fixed asset groups for the asset types
D is correct.
Explanation: Fixed asset groups are set up so that assets of the same type share common setup values, which is why group configuration is completed as part of the Fixed assets setup before assets are created.
A is incorrect: Asset budgeting records planned fixed asset amounts and does not supply default setup values for asset records.
B is incorrect: The fixed assets roll forward report is a reporting task and has no effect on the defaults applied when an asset is created.
C is incorrect: Splitting a fixed asset is an operational task performed on an existing asset, not a configuration that standardizes new asset records.
Q10 - Question
A single fixed asset record was created for a production line. Management now sells part of the line to a partner company and needs a separate asset record for the portion that was sold, while keeping the remainder on the original asset. Which task should the accountant perform?
Domain: Manage fixed assets Type: Single choice
- A. Update fixed asset information on the original asset record
- B. Split the fixed asset to create a separate asset for the portion sold
- C. Transfer the fixed asset to the partner company's asset group
- D. Recalculate replacement costs and insured values for the asset group
B is correct.
Explanation: Splitting a fixed asset creates a separate asset record for part of an existing asset, which is the task required when only a portion of the recorded asset must be accounted for separately.
A is incorrect: Updating fixed asset information changes details on the existing record but does not produce a second asset record.
C is incorrect: Transferring a fixed asset moves the asset so it is reported differently and does not divide the asset into two records.
D is incorrect: Recalculating replacement costs and insured values adjusts valuation fields for assets in a group and leaves the number of asset records unchanged.