81242AE – Financial Essentials in Microsoft Dynamics 365 Business Central

Test Your Knowledge Questions

Module 1 – Getting Started with Finance

1. Which of the following role centers is best suited for a financial user?
a. Business Manager
b. Accounting Manager
c. Purchasing Agent
d. Shop Supervisor

Motivation: There are more than twenty role centers, each providing links to the most commonly used
data for your job role. For a financial user, the Accounting Manager role center, along with other role
centers, best suits the professional needs.

Lesson: Finance Focused Role Centers

2. Which of the following types of master data is strictly required for working with Finance in
Dynamics 365 Business Central?
a. G/L accounts
b. Items
c. Dimensions
d. Customers

Motivation: Working with Finance in Dynamics 365 Business Central can involve working with different
types of master data. However, since g/l accounts represents the financial structure of a company, it is
the only type of master data that is an absolute requirement.

Lesson: Finance Master Data

Module 2 – Chart of Accounts

1. In the G/L Account Card, what field is used to define the layout of your financial statement?
(choose 2 that apply)
a. Account Type
b. Debit/Credit
c. Account Category
d. Account Subcategory

Motivation: The g/l account categories are set up to include a specific type of report and therefor can
help define the layout of your financial statements.

Lesson: G/L Account Categories

2. Besides using the Name on a G/L account card, what other option do you have to specify that a
specific G/L account is a liability account?
 a. Select Liability in the G/L Account Type field.
b. Assign Liability in the Account Category field on the G/L account card.
c. Create a general product posting group LIABILITIES and assign it to the G/L account.
d. There is no other option to do this besides using the Name field.

Motivation: You can assign account categories and subcategories to G/L accounts. For a liability account,
the category would be Liabilities. Optionally you can assign a subcategory such as Current Liabilities.

Lesson: G/L Account Categories

3. How do you define a G/L account as a sales account?

a. By assigning a general business posting group that is linked to a sales account.
b. By assigning a general product posting group that is linked to a sales account.
c. By linking the combination of the general business posting group and general product
posting group to a sales account.
d. By selecting Sale in the Gen. Posting Type field.

Motivation: With the Gen. Posting Type field, you specify if a G/L account by default is a sales or
purchase account.

Lesson: Create an Account in the G/L Account Card

4. Direct posting is typically not enabled for G/L accounts on which only system-generated
transactions are posted. For which of the following G/L account would you select direct posting?
a. Receivables account
b. Cash account
c. Office supplies account
d. Inventory Finished Goods account

Motivation: By selecting the Direct Posting field, you can select the account in journals and documents,
and directly post on the G/L account.

Lesson: Create an Account in the G/L Account Card

5. The Indent Chart of Account function has some of advantages. Which of the following
statements are correct?
a. The function will create a structure in the Chart of Accounts based on the Account Type.
b. The function will enter the totaling formulas in the Totaling field, based on the g/l
accounts with Account Type Begin-total and End-total.
c. The function can only be used once when setting up the Chart of Accounts.
d. The function will update the structure and the Totaling field, each time it is used.

Motivation: The Indent Chart of Accounts can be used as many times as necessary and will update each
time the structure as well as the Totaling field.

Lesson: Maintaining the Chart of Accounts

Module 3 – General Journals

1. What type of journal does not have a balancing account on the line?
a. Payment Journal
b. Recurring General Journal
c. General Journal
d. Sales Journal

Motivation: The recurring general journal does not have a balancing account on the line. Instead, you can
use the Allocated Amt. (LCY) field to allocate to one or multiple balancing accounts.

Lesson: Recurring Journals

2. Which of the following statements on the Preview Posting function is not true?
a. The Preview Posting function helps you to understand the effect transactions will have.
a. You can use the Preview Posting function from the job journal and job G/L journal.
b. The Preview Posting function shows the receivables G/L account that will be used when
posting a sales invoice.
c. You can use the Preview Posting function when unapplying vendor ledger entries.

Motivation: You cannot use the Preview Posting function from the job journal because the job journal
does not post to the general ledger.

Lesson: Processing Journal Entries

3. Which of the following is not a valid Calculation Method used to define Deferral Templates?
a. Straight-Line
b. Logarithmic
c. Equal per Period
d. User-Defined

Motivation: Logarithmic is not a valid option.

Lesson: Deferrals

4. When posting the general journal, which of the following statements are true? (Select all that
apply)
a. The general journal lines always must be balanced by posting date.
b. The general journal lines must be visible to be included in the Post function
c. Non-visible general journal lines are not posted only when they are not balanced.
d. The general journal lines always must be balanced by document number and document
type.

Motivation: Non-visible general journal lines are never posted, even when they do balance. General
journal lines always must be balanced by posting date, but the only have to be balanced by document
number and document type when the Force Doc. Balance field is selected in the controlling general
journal template.

Lesson: Processing Journal Entries

Module 4 – Processing Customer and Vendor Invoices

1. You receive a purchase invoice from a vendor invoicing multiple receipts of the last month. How
can you process the invoice?
a. In the purchase order list, select the orders from which items are invoiced, and click Post
Batch in the ribbon.
b. Create a new purchase invoice and run the Get Receipt Lines function to select the items
that are being invoiced by the vendor.
c. Run the Combine Receipts batch job for this vendor.
d. Create a new purchase invoice and enter the invoiced items manually.

Motivation: The Get Receipt Lines function allows you to invoice multiple receipts at once.

Lesson: Processing Vendor Invoices

2. Immediately after posting a sales invoice, you realize that you have invoiced an item at a wrong
price. What can you do to post a corrective credit memo and prepare a new sales invoice that
you can use to invoice at a correct price?
a. From the posted sales invoice, run the Create Corrective Credit Memo function.
b. From the posted sales invoice, run the Cancel function.
c. From the posted sales invoice, run the Correct function.
d. From the posted sales invoice, run the Get Posted Document Lines to Reverse function.

Motivation: The Correct function that you can run from a posted invoice, posts a credit memo for the
invoice, and prepares a new sales invoice that you can use to correct the incorrect invoice.

Lesson: Correcting Posted Invoices

3. Which of the following statements on the Combine Shipments functions is not true?
a. In the combine shipments request page, you can enter a different posting date and
document date.
b. You can enable the calculation of invoice discount when running the Combine
Shipments batch job.
c. After running the Combine Shipments batch job, sales invoices are automatically posted.
d. You can run the Combine Shipments batch job only for specific customers.

Motivation: In the combine shipments request page, you can use the Post Invoices field to specify if you
want the system to try and post the sales invoices when running the batch job.

Lesson: Invoicing Customers

Module 5 – Cash Management

1. What is the result of selecting “Apply to oldest” in the Application Method field on the customer
card?
a. Payments are always applied to the oldest of the customer’s open entries.
b. If you do not specify a document for the payment to be applied to, payments are applied
to the oldest of the customer’s open entries.
c. The oldest of the customer’s open entries are displayed on the Apply Entries page but
you still have to select the entries to apply to manually.
d. You can only apply to one entry at a time.

Motivation: Payments can be applied to the oldest of the customer’s open entries, but you can still
apply manually.

Lesson: Customer and Vendors in Cash Management

2. On the Bank Account Card, what makes the program post the related G/L entries for each
transaction by using the bank account?
a. Posting Account No.
b. Bank Acc. Posting Group
c. Bank Account No.
d. Bank Acc. G/L Group

Motivation: With the bank account posting group, you can specify the G/L account to post bank
transactions to.

Lesson: Bank Account Card Fields

3. After importing a bank statement in the payment reconciliation journal, you use the Apply
Automatically function. You do not agree with one of the suggestions the system makes.
What should you do?
a. First use the Unapply Entries function, and then go to the Apply Manually page and
select the entries you want to apply.
b. First post the payment reconciliation journal, then use the Unapply Entries function, and
then go to the Apply Manually page and select the entries you want to apply.
c. In the payment reconciliation journal, go to the Apply Manually page, use the Remove
Applications function to remove the initial application, and select the entries you want
to apply.
d. On the payment reconciliation journal lines, first change the Match Confidence field to
Manual, and then go to the Apply Manually page, use the Remove Applications function
to remove the initial application, and select the entries you want to apply

Motivation: The Apply Automatically function only suggests the applications the system would do
when posting the lines. If you do not agree with the suggestions the system makes when applying
automatically, you can still apply manually from the Apply Manually page.

Lesson: Using the Payment Reconciliation Journal

4. In the payment journal, you have used the Export Payments to File function to create a payment
file. However, before you could send it to your bank, the file gets lost.
What should you do?
a. If the payment journal is already posted, first use the Reverse Register function, to
reverse the posted payments, and then go to periodic activities to run the Reexport
Payments to File function.
b. Because a payment file can only be created once, you have to go to the Credit Transfer
Reg. Entries page where you can print a list of the payments. You can send this to your
bank.
c. Run the Reexport Payments to File function from the payment journal.
d. Run the Reexport Payments to File function from the credit transfer registers.

Motivation: Even after exporting the original payment file, you can reexport a payment file from the
credit transfer registers. This is useful in cases of lost or damaged files.

Lesson: Use the Suggest Vendor Payments Batch Job

5. What can the Bank Data Conversion Service be used for?

a. To have a bank statement file that you receive from your bank converted to a data
stream that you can import into Microsoft Dynamics NAV, and to have payment
information that you export as a data stream converted to a bank payment file in the
format that your bank requires.
b. To have a bank statement file that you receive from your bank converted to a data
stream that you can import into Microsoft Dynamics NAV.
c. To have payment information that you export as a data stream converted to a bank
payment file in the format that your bank requires.
d. To convert SEPA files to a data stream that you can import into and export from
Microsoft Dynamics NAV.

Motivation: Although the SEPA format is a commonly used format for bank statement and
payment files, other formats are also used. The Bank Data Conversion Service can convert other
formats that can be used in NAV.

Lesson: Bank Data Conversion Service

6. Which of the following statements is correct, when using the Suggest Vendor Payments
function?
a. It is possible to generate payment lines with a different posting date, based on the Pmt.
Discount Date.
b. A partial payment can be suggested when only a limited amount is available to pay the
vendors of the highest priority.
c. Only one payment per vendor is suggested.
d. It is possible to suggest a payment posting date, by adding a number of days to the
original ledger entry due date.
Motivation: In the Suggest Vendor Payments batch job, you can use the Calculate Posting Date
from Applies-to-Doc Due Date field for the payment journal to calculate the posting date for the
 payment line. When also using the Applies-to-Doc Due Date Offset field, you can add or deduct a
fixed number of days to the calculated posting date.
Lesson: Use the Suggest Vendor Payments Batch Job

Module 6 – Bank Account Reconciliations

1. Which of the following must occur before you post a bank reconciliation?
a. The Bank Account Statement - Test Report is printed.
b. The Total Difference field equals the sum of all lines with the Type field set to Difference.
c. The value in the Statement Ending Balance field must not equal the value in the Total
Balance field.
d. There are unapplied entries.

Motivation: This is used to include differences in the bank account reconciliations, for example when the
bank credited a wrong amount. These differences are in general corrected in the next bank reconciliation.

Lesson: Performing a Bank Reconciliation

2. When creating a new bank account reconciliation, you must reconcile the bank statement lines
with the bank account ledger entries. Which of the following options do you have to retrieve the
bank statement lines in the bank account reconciliation page? (choose 2 that apply)
a. Run the Get Bank Statement Lines batch from the periodic activities in the cash
management application area.
b. Use the Import Bank Statement function from the ribbon on the bank account
reconciliation page.
c. Use the Suggest Lines function from the ribbon on the bank account reconciliation page.
d. Transfer the bank statement lines from the bank account card to the bank account
reconciliation page.

Motivation: If you receive bank statement files from your bank, you can import them from the bank
account reconciliation page. Otherwise you can use the Suggest Lines function to retrieve the bank
account ledger entries.

Lesson: Performing a Bank Reconciliation

3. To post the bank reconciliation, which fields must balance?

a. Statement ending balance and balance
b. Statement ending balance and total balance
c. Total balance and balance
d. Statement balance and statement ending balance

Motivation: The statement ending balance is entered manually by the user and should match the total in
the Total Balance field, which is the sum of all the bank statement lines of that bank reconciliation.

Lesson: Performing a Bank Reconciliation

 4. On which two fields is the amount in the Difference field based on?
a. Statement amount and total balance
b. Statement amount and balance
c. Applied amount and balance
d. Statement amount and applied amount

Motivation: The amount in the Difference field is the sum of the amounts in the Statement Amount field
and the Applied Amount field.

Lesson: Performing a Bank Reconciliation

Module 7 – Payment Discount and Payment Tolerances

1. On the General Ledger Setup page, what check box must contain a check mark so that you can
enter payment discount accounts in the General Posting Setup window?
a. Adjust for Payment Disc.
b. Pmt. Disc. Excl. VAT
c. Pmt. Disc. Incl. VAT
d. Use Payment Disc.

Motivation: When you set up the system to calculate payment discount including VAT, you have to
specify if you want to adjust the VAT amount for the payment discount. If you select the Adjust for
Payment Disc. field to do so, you must set up the payment discount accounts in the General Posting
Setup window.

Lesson: Set Up Payment Discounts

2. Your customer took 3% payment discount instead of the 2% allowed. You decide to grant the
customer the 3% payment discount, but payment tolerances are not set up in the system. What
is the best way to adjust the payment discount when processing the payment in the cash receipt
journal?
a. Go to the posted invoice and change the Payment Discount % field to 3%. Then apply
the invoice in the cash receipt journal.
b. On the cash receipt journal line, enter manually the payment discount amount in the
Payment Discount field.
c. In the cash receipt journal, apply the full amount of the invoice, and on the following
line, enter the payment discount amount.
d. In the Apply Customer Entries page, set the applies-to ID for the invoice the customer
paid, and manually update the Remaining Pmt. Disc. Possible field to match the 3%
taken by the customer.

Motivation: When applying customer and vendor ledger entries, you can the Remaining Pmt. Disc.
Possible field to match the amount taken by the customer. By doing so, the system will automatically
process the payment discount when posting the journal.

Lesson: How to process Sales Payment Discounts

 3. What do you select on the Payment Terms page, to grant a payment discount of three percent if
payment is received within ten days of the document date?
a. Enter D10 in the Discount Date Calculation field, and 3 in the Discount % Field.
b. Enter 10D in the Discount Date Calculation field, and .03 in the Discount % Field.
c. Enter 10D in the Discount Date Calculation field, and 3 in the Discount % Field.
d. Enter D10 in the Discount Date Calculation field, and .03 in the Discount % Field.

Motivation: 10D is the correct date formula to use. In the Discount % field, you enter the percentage.

Lesson: Set Up Payment Discounts

4. For some customers, you want to be notified by the system every time an application has a
balance amount within the tolerance specified in the Max. Payment Tolerance field on the
General Ledger Setup page. How can you achieve this?
a. In the General Ledger Setup, enable the Payment Tolerance Warning field.
b. For these customers, on the customer card, enable the Payment Tolerance Warning
field.
c. For these customers, when applying a payment, run the Check Payment Tolerance
Warning function.
d. Enable the Payment Tolerance Warning field for all the currencies assigned to the
customers you want to be notified for.

Motivation: By enabling the Payment Tolerance Warning field in the general ledger setup, users are
notified when the payment tolerance settings are triggered when processing payments. This allows the
user to accept or refuse the tolerance.

Lesson: Set Up a Payment Discount Tolerance and Payment Tolerance

Module 8 – Reminders and Finance Charge Memos

1. Which of the following statements on reminders is true?

a. A reminder term in Microsoft Dynamics NAV always has three levels.
b. You can charge interest to a customer by using reminders.
c. You can only create each reminder level once.
d. Additional fees are always posted to the general ledger.

Motivation: Interest can be charged with finance charge memos, but also by using reminders. For
both options you need to set up a finance charge term and assign it to customers.

Lesson: Reminder Terms

2. What can you use the Update Reminder Text function for?
a. The beginning and ending text on the reminder are updated. If you use text variables,
they are recalculated.
b. The beginning and ending text on the reminder is changed.
c. If you use text variables, they are recalculated.
d. The beginning and ending text are translated to the language you choose when running
the functions.
 Motivation: You can use the Update Reminder Text function to update the reminder text from one
level to another, or to recalculate variables used in the reminder text.

Lesson: Reminder Terms

3. On which on the following entries can you calculate interest?

a. Open entries, applied entries, all entries
b. Open entries, applied entries, closed entries.
c. Applied entries, closed entries, all entries.
d. Open entries, closed entries, all entries.

Motivation: Interest can be calculated on open, closed, or all entries.

Lesson: Set Up and Assign Finance Charge Terms

4. Which option can you use when running the Create Reminders batch job to make sure that none
of the open customer ledger entries, that are not on hold and are not due for payment, will be
shown on reminders?
a. Include Entries On Hold
b. Use Header Level
c. Only Entries with Overdue Amount
d. None – all open entries that are not on hold even if the entries are not due for payment
yet will be shown on reminders.

Motivation: By selecting the Only Entries with Overdue Amount field, only overdue entries are
included in the reminder.

Lesson: Create and Issue Reminders

Module 9 – VAT

1. Where can you set up prices including VAT? (choose 3 that apply)
a. G/L accounts
b. Customer and vendor cards
c. Sales and purchase documents
d. Item cards

Motivation: To have the system display prices including VAT in sales and purchase documents, you
can select Prices Including VAT field on customer and vendor cards, item cards, and sales and
purchase documents.

Lesson: Display VAT Amounts in Sales and Purchase Documents

2. What happens when the Calc. and Post VAT Settlement batch job is posted?
a. VAT entries are closed and removed.
b. Purchase VAT entries are applied with sales VAT entries.
c. Purchase and Sales VAT amounts are transferred to the VAT settlement account.
d. A payment line is suggested in the payment journal.
Motivation: Posting the Calc. and Post VAT Settlement batch job results in transferring purchase and
sales VAT amounts to the settlement account specified in the batch job.

Lesson: VAT Settlement

3. Which of the following is required to adjust VAT amounts in sales and purchase documents?
(choose 3 that apply)
a. The VAT difference must be allowed for sales and purchases.
b. A maximum VAT correction amount allowed must be specified.
c. The Invoicing FastTab must be selected on the Sales Order Statistics or Purchase Order
Statistics window.
d. A minimum VAT correction amount allowed must be specified.

Motivation: In the sales & receivables setup and the purchases & payables setup you can allow VAT
differences. Based on the maximum VAT difference allowed in the general ledger setup, you can then
adjust VAT amounts from the sales and purchase order statistics.

Lesson: Adjust VAT Amounts in Sales and Purchase Documents and Journals

4. Which of the following statements on prices including VAT is not correct?

a. A sales document will present either the prices including VAT or the prices excluding
VAT, depending on the value in the Prices including VAT check box.
b. When both Prices including VAT is selected on the item card and in the sales header, the
Unit Price on the item card is copied to Unit Price incl. VAT field on the sales lines.
c. When Prices including VAT is selected on the item card, but not in the sales header, the
item card will take priority and the Unit Price on the item card is copied to the Unit Price
incl. VAT field on the sales line.
d. It is possible to manually change the value of the Prices including VAT check box in the
sales header.
Motivation: In this situation, one setting will not take priority over the other, but the Unit Price
including VAT field on the item card will be recalculated to a unit price excluding VAT. The VAT
amount included in the unit price on the item card is calculated by using the VAT % for the VAT
bus. Posting gr. (Price) and the VAT Prod. Posting Group combination. The Unit Price on the item
card that is reduced by the VAT amount is then entered in the Unit Price Excl. VAT field in the
sales lines.
Lesson: Display VAT Amounts in Sales and Purchase Documents

5. When processing unrealized VAT, which setup has to be completed? (select all that apply)
a. Unrealized VAT check box on the General Ledger Setup page
b. Unrealized VAT Type on the VAT Posting Setup page
c. Unrealized VAT % on the VAT Posting Setup page
d. Various unrealized VAT g/l accounts on the VAT Posting Setup page.

Motivation: The Unrealized VAT % is not an actual field on the VAT Posting Setup page.

Lesson: Unrealized VAT

Module 10 – Prepayments

1. What status is used when an order has one or more lines with a prepayment amount, and a
prepayment invoice has not been posted?
a. Pending Prepayment
b. Prepayment Awaiting
c. Pending Approval
d. Open

Motivation: As long as a prepayment invoice has not been posted, the status of the order remains
“Open”. Once a prepayment invoice is posted, the status automatically changes to “Pending
Prepayment”.

Lesson: Process Prepayment Sales and Purchase Orders

2. One of our vendors requires us to prepay 40% when ordering items from their “SUMMER” range.
This item range contains 20 different items.
How do you set this up in Microsoft Dynamics Business Central?
a. Create an Item Discount Group to which you assign the 20 items. Then in the
Prepayment Percentages page combine the vendor with the item discount group, and
enter 40 in the Prepayment % field.
b. Create an Item Prepayment Group to which you assign the 20 items. Then in the
Prepayment Percentages page combine the vendor with the item prepayment group,
and enter 40 in the Prepayment % field.
c. Create an Inventory Posting Group to which you assign the 20 items. Then in the
Prepayment Percentages page combine the vendor with the Inventory Posting group,
and enter 40 in the Prepayment % field.
d. In the Prepayment Percentages page, enter individual lines for all 20 items combined
with the vendor, and enter 40 in the Prepayment % field.

Motivation: You can assign a prepayment percentage to the combination of vendor and item. This
can be done from the Purchase Prepmt. Percentages page that you can access from the vendor or
the item.

Lesson: How to Assign Prepayment Percentages

3. Which option can be used to make sure that you cannot ship or invoice orders to customers with
unpaid prepayment amounts?
a. Check Prepmt. when Posting in the Purchases & Payables Setup.
b. Payment Tolerance Warning in the General Ledger Setup.
c. Check Prepmt. when Posting in the Sales & Receivables Setup.
d. This option is not available.

Motivation: With the Check Prepmt. when Posting field in the sales & receivables setup, shipping and
invoicing items are blocked as long as prepayment amounts remain unpaid.

Lesson: Setup Prepayments

Module 11 – Year End Closing Processes

1. Where are fiscal years defined?

a. Fiscal Year page
b. Accounting Periods page
c. General Ledger Setup page
d. Company Setup page

Motivation: You can only define fiscal years in the Accounting Periods window.

Lesson: Accounting Periods

2. Where are posting date restrictions set in Microsoft Dynamics NAV? (choose 2 that apply)
a. General Ledger Setup page
b. Database or Windows Logon page
c. User Setup page
d. General Journal Templates page

Motivation: You can set posting date restrictions in the general ledger setup and in the user setup. Then
user setup takes priority over the general ledger setup.

Lesson: Allow and Disallow Posting

3. Which rule applies when you change the starting date of an accounting period?
a. You cannot change the starting date of an accounting period.
b. The starting date can only be changed for accounting periods in the future.
c. You can change the starting date of an accounting period.
d. The starting date can only be changed for accounting periods without a date lock.

Motivation: The Date Locked fields prevents you from changing the starting date of an accounting
period. If you close a fiscal year, the Date Locked field is selected atomically for all the accounting periods
of the closed year, and the first accounting period of the fiscal year following the closed one.

Lesson: Creating New Accounting Periods

4. In the G/L Account Card, what field is used to determine which accounts are closed during the
fiscal year end closing process?
a. Reconciliation Account
b. Debit/Credit
c. Account Type
d. Income/Balance

Motivation: If you run the Close Fiscal Year report, all income statement accounts are balanced.
The Income/Balance field on the G/L account card is used to determine which accounts are
income statement accounts.

Lesson: Closing a Fiscal Year

5. What does not occur after the Close Year process is run?
 a. The next entries posted in the closed year are marked as prior-year entries.
b. The Closed and Date Locked check boxes in the Accounting Periods window are selected.
c. Period lengths of closed periods cannot be changed.
d. A new fiscal year is created.

Motivation: Running the Close Year process will not create a new fiscal year. To do this, you can use the
Create Year function.

Lesson: Closing a Fiscal Year

6. What type of account are closing entries transferred to?

a. Accrued Earnings
b. Retained Earnings
c. Accrual Entries
d. Retained Accruals

Motivation: In the Close Income Statement batch job, you can choose the retained earnings account to
post balance of all closing entries to.

Lesson: Closing a Fiscal Year