MB-310 · Question #216
Drag and Drop Question You are configuring Microsoft Dynamics 365 Finance. Your company sells televisions, radios, and warranties. Televisions are considered the primary revenue source. You enter a…
The correct answer is Nonessential; Essential; Post contract support (PCS). D365 Finance Revenue Recognition - Revenue Types Explained Context: How Revenue Types Work In Microsoft Dynamics 365 Finance Revenue Recognition, when a discount is applied to a multi-item sales order, the system must decide which products absorb the discount and which products…
Question
Exhibit
Answer Area
Drag items
Correct arrangement
- Nonessential
- Essential
- Post contract support (PCS)
Explanation
D365 Finance Revenue Recognition - Revenue Types Explained
Context: How Revenue Types Work
In Microsoft Dynamics 365 Finance Revenue Recognition, when a discount is applied to a multi-item sales order, the system must decide which products absorb the discount and which products keep their fixed price. The revenue type on each released product controls this behavior.
The Three Revenue Types
| Revenue Type | Behavior |
|---|---|
| Essential | Fixed standalone selling price (SSP). Discount is never applied to this item. |
| Nonessential | Secondary item. Absorbs discounts after essential items are protected. |
| Post Contract Support (PCS) | Its revenue is reallocated outward to essential items (e.g., televisions). |
Product-to-Revenue Type Mapping
The correct arrangement maps to the products in this order: Radios → Televisions → Warranties
1. Radios → Nonessential
The scenario states: "any remaining discount can be applied by using the radios."
Nonessential is the only revenue type where discount absorption is permitted. D365 applies the order-level discount to nonessential items first, making radios the "discount sink." Common mistake: thinking Essential items absorb discounts - they do the opposite.
2. Televisions → Essential
The scenario states: "Televisions must have a fixed price for revenue recognition."
Essential locks the item's SSP. No reallocation or discount touches it. Televisions are the primary revenue driver, so their recognized revenue amount stays exactly at their standalone price. Common mistake: confusing "primary product" with "Nonessential" - the name is counterintuitive, but Essential = protected/fixed.
3. Warranties → Post Contract Support (PCS)
The scenario states: "The revenue of warranties must be allocated to all televisions."
PCS is specifically designed for warranties and service contracts whose revenue gets pushed outward and reallocated to paired Essential items (the televisions). The warranty itself doesn't recognize standalone revenue - its SSP flows into the TV revenue allocation. Common mistake: using Nonessential for warranties, which would make warranties absorb discounts rather than reallocate revenue to televisions.
Summary Rule
Essential = protect it | Nonessential = discount it | PCS = spread its revenue to Essential items
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