Describe Dynamics 365 Finance
This domain checks that you can describe the general ledger and the subledgers that feed it, and that you can place common Finance scenarios - pay a vendor, collect from a customer, close a period - in the right module. Expect terminology questions rather than configuration steps.
The ledger core
A legal entity owns one ledger. The chart of accounts can be shared across legal entities, and main accounts are classified as balance sheet, profit and loss, revenue or expense. Account structures and advanced rules decide which main account plus financial dimension combinations are valid; dimensions are not accounts. Journals post vouchers that update the ledger, while AP, AR, bank and fixed assets remain subledgers until they post.
The main subledgers
- Accounts payable: vendor invoices, terms of payment, cash discounts, payment proposals, settlements, 1099 reporting.
- Accounts receivable: customer and free text invoices, collection letters, aging, credit and collections, write-offs.
- Cash and bank management: bank accounts, checks, electronic payments, bank reconciliation.
- Fixed assets: depreciation books and profiles, conventions, acquisitions and disposals.
- Budgeting: budget models, budget register entries, budget control versus budget planning.
Worked example
A vendor invoice of 1,000 is posted with terms 2% 10, net 30. Posting debits the expense and credits the AP subledger; no discount is booked yet. When the payment proposal runs inside the discount window, the payment is 980, and the extra 20 posts to the cash-discount main account configured on the terms of payment. If budget control is on and only 500 of budget remains, posting is blocked or warned according to that configuration - budget control checks availability, while budget planning prepares the figures.
Traps that cost marks
Questions routinely reverse ledger settlement and subledger settlement, and budget control and budget planning. A shared chart of accounts does not mean shared account structures, ledgers or fiscal calendars. Financial dimensions are not main accounts, and operating units are not legal entities.