Learn the top three actions to improve financial consolidation accuracy in Microsoft Dynamics 365 Finance, including intercompany eliminations, currency revaluation, and automated consolidation processes.
Table of Contents
Question
The finance team at Adventure Works Cycles is preparing for the end-of-year financial consolidation. They have multiple subsidiaries with different base currencies and need to ensure that all financial statements are accurately consolidated into the parent company’s reporting currency. You need to evaluate the existing consolidation process and recommend improvements to ensure accuracy and compliance with international financial reporting standards. What three actions should you perform? Each correct answer presents part of the solution. Choose three.
A. Consolidate all financial statements manually to ensure control over the conversion process.
B. Define intercompany elimination rules to remove transactions between subsidiaries during consolidation.
C. Ignore subsidiary base currencies and consolidate using the parent company’s currency only.
D. Implement foreign currency revaluation processes for each subsidiary before consolidation.
E. Use the consolidation functionality in Dynamics 365 Finance to combine financial results and apply currency translation.
Answer
B. Define intercompany elimination rules to remove transactions between subsidiaries during consolidation.
D. Implement foreign currency revaluation processes for each subsidiary before consolidation.
E. Use the consolidation functionality in Dynamics 365 Finance to combine financial results and apply currency translation.
Explanation
Implementing foreign currency revaluation ensures that currency amounts are accurate before consolidation. Defining intercompany elimination rules is essential to prevent double-counting of internal transactions. Using the consolidation functionality in Dynamics 365 Finance allows for an automated and standardized process, including currency translation. Manually consolidating financial statements (D) is error-prone and not efficient. Ignoring subsidiary base currencies (E) would result in inaccurate financial reporting.
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.