Microsoft Dynamics 365 Finance — Question 50

You are configuring taxes in Dynamics 365 Finance for a client.

Vendor invoices require a five percent sales tax calculation. Per government rules, the client can recover only 60 percent of this five percent sales tax amount against certain commodities. The remaining 40 percent is non-recoverable.

You need to configure the sales taxes to post to the expense account.

Where should you configure the sales tax percentage?

Answer options

• A. Sales tax group
• B. Ledger posting groups
• C. Tax code
• D. Item sales tax group

Correct answer: C

Explanation

The correct answer is C, the Tax code, because it directly defines the sales tax percentage that will be applied to transactions. Options A (Sales tax group) and D (Item sales tax group) categorize transactions but do not specify tax rates, while option B (Ledger posting groups) is related to account postings and does not set tax percentages.