Learn the step-by-step process to set up revenue recognition for bundled items in Microsoft Dynamics 365 Finance. Discover how using Bill of Materials (BOM) ensures compliance with international accounting standards and accurate financial reporting. Perfect for MB-310 exam preparation!
Table of Contents
Question
A multinational corporation is using Microsoft Dynamics 365 Finance to manage their financial operations. They have recently expanded their product line to include bundled items. These bundlesare sold globally across various markets with different tax regulations. You need to configure the system for proper revenue recognition of the bundled items in order to ensure that the revenue from these bundled items is recognized appropriately according to the company’s revenue recognition policy and in compliance with international accounting standards. What should you do?
A. Create a new general ledger account specifically for bundled items and manually adjust revenue after each sale.
B. Exclude bundled items from revenue recognition and handle them separately through manual journal entries.
C. Set up the bundle items as Bill of Materials (BOM) with components assigned, and ensure that revenue recognition is configured for each component.
D. Use a fixed allocation method for revenue recognition regardless of the individual components of the bundles.
Answer
C. Set up the bundle items as Bill of Materials (BOM) with components assigned, and ensure that revenue recognition is configured for each component.
Explanation
Setting up the bundle items as BOM with components assigned allows for accurate revenue distribution among the components, which is essential for compliance with revenue recognition standards. Creating a new general ledger account for bundled items does not address the need for revenue recognition configuration. Excluding bundled items from revenue recognition would not comply with international accounting standards. Using a fixed allocation method does not take into account the varying contributions of individual components to the bundle’s total value.
Microsoft Dynamics 365 Finance Functional Consultant MB-310 certification exam assessment practice question and answer (Q&A) dump including multiple choice questions (MCQ) and objective type questions, with detail explanation and reference available free, helpful to pass the Microsoft Dynamics 365 Finance Functional Consultant MB-310 exam and earn Microsoft Dynamics 365 Finance Functional Consultant MB-310 certification.