Learn the top 3 steps to set up revenue recognition for bundled items in Microsoft Dynamics 365 Finance. Ensure compliance with international accounting standards and streamline global sales operations.
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 items are sold globally and require revenue recognition over different time periods based on contractual obligations. You need to configure the system to ensure that the revenue from these bundled items is recognized appropriately according to the company’s global sales strategy. You must also be in compliance with international accounting standards. What three actions should you perform ? Each correct answer presents part of the solution. Choose three.
A. Configure revenue schedules for each period that revenue can be deferred for, ensuring they reflect the expected milestone dates for revenue recognition.
B. Define the revenue price and revenue schedule for each component of the bundle items on the Released products page.
C. Disable the Revenue recognition feature in Feature management as it is not supported for items sold in Commerce channels.
D. Set up a new journal type specifically for revenue recognition to handle deferred revenue and reallocation scenarios.
E. Use the General ledger module to manually track revenue recognition entries for bundled items.
Answer
A. Configure revenue schedules for each period that revenue can be deferred for, ensuring they reflect the expected milestone dates for revenue recognition.
B. Define the revenue price and revenue schedule for each component of the bundle items on the Released products page.
D. Set up a new journal type specifically for revenue recognition to handle deferred revenue and reallocation scenarios.
Explanation
Setting up a new journal type for revenue recognition is necessary to handle the specific accounting entries related to deferred revenue and reallocation. Configuring revenue schedules for each deferral period is essential to comply with the revenue recognition principle, which states that revenue should be recognized when it is earned. Defining the revenue price and schedule for each component of the bundle ensures accurate and compliant revenue allocation. Using the General ledger module to manually track revenue recognition would be inefficient and prone to errors, hence it is not recommended. Disabling the Revenue recognition feature would prevent the company from using the necessary functionality to manage revenue for bundled items, which is not the correct approach.
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