Microsoft Dynamics 365 Finance — Question 77

A United States-based company uses Dynamics 365 Finance to collect and report sales tax. The company has a main account for each state where they collect and report sales tax.

The system must transfer the tax liability for each state to their respective main account automatically every month when they run the settle and post sales tax process.

You need to configure Dynamics 365 Finance.

What should you do?

Answer options

• A. Create a sales tax settlement period for each state.
• B. Select a vendor account during the sales tax group setup.
• C. Create a sales tax ledger posting group for each state. Associate a settlement account to a main account for vendor accounts in the vendor posting profile.
• D. Create a sales tax authority for each state and associate the authority with the respective main account.

Correct answer: C

Explanation

The correct answer is C because creating a sales tax ledger posting group for each state allows you to associate a specific settlement account with the main account in the vendor posting profile, ensuring accurate tax liability transfers. Option A is incorrect as the settlement period does not directly manage the transfer process. Option B is not relevant to the automatic transfer of tax liabilities. Option D, while related to sales tax authorities, does not address the requirement of linking the correct settlement accounts to the main accounts for automatic posting.