Learn how to fix financial report discrepancies caused by fluctuating exchange rates in Microsoft Dynamics 365 Finance. Discover the best practice for revaluing foreign currency transactions.
Table of Contents
Question
A multinational corporation is experiencing discrepancies in their financial reports due to fluctuating exchange rates. These fluctuations affect their foreign currency transactions. You need to ensure that the open transactions in Accounts payable and Accounts receivable reflect the current value based on the latest exchange rates. What should you do?
A. Instruct the accounts team to only record transactions in the company’s base currency to avoid future discrepancies.
B. Manually adjust the open transactions in the General ledger to match the current exchange rates.
C. Run the foreign currency revaluation process for both Accounts payable and Accounts receivable using the latest exchange rates.
D. Update the exchange rates in the Currency exchange rates page without running the revaluation process.
Answer
C. Run the foreign currency revaluation process for both Accounts payable and Accounts receivable using the latest exchange rates.
Explanation
Running the foreign currency revaluation process updates the value of open transactions to reflect the current exchange rates, which is necessary to correct discrepancies. Manually adjusting transactions in the General ledger is error-prone and not scalable. Updating exchange rates without revaluation does not update the transaction values. Recording transactions only in the base currency is impractical for a multinational corporation dealing with multiple currencies.
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.