Drag and Drop Question You are implementing revenue recognition functionality in Microsoft Dynamics 365 Finance. You need to configure revenue schedules to meet the following requirements…

The correct answer is Automatic contract terms; Recognition basis. Drag-and-Drop Explanation: Revenue Schedules in D365 Finance The Two Requirements and Their Answers --- Requirement 1: Agreement start and end dates must be determined by the system Answer: Automatic contract terms In D365 Finance Revenue Recognition, Automatic contract terms…

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Question

Drag and Drop Question You are implementing revenue recognition functionality in Microsoft Dynamics 365 Finance. You need to configure revenue schedules to meet the following requirements: - Agreement start and end dates must be determined by the system. - Determine revenue price allocation across the occurrences based on contract terms. Which feature should you use? To answer, drag the appropriate features to the correct requirements. Each feature may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content. NOTE: Each correct selection is worth one point. Answer:

Exhibit

Answer Area

Drag items

Recognition basisRecognition conventionAutomatic contract termsPost contract support (PCS)

Correct arrangement

Automatic contract terms
Recognition basis

Explanation

Drag-and-Drop Explanation: Revenue Schedules in D365 Finance

The Two Requirements and Their Answers

Requirement 1: Agreement start and end dates must be determined by the system Answer: Automatic contract terms

In D365 Finance Revenue Recognition, Automatic contract terms is a feature that automatically calculates the start and end dates of a revenue schedule based on predefined rules - without requiring manual date entry. When enabled, the system derives the contract period dates from the transaction or item setup, removing human input from that process. This is the only feature among the options that directly addresses date determination by the system.

Requirement 2: Determine revenue price allocation across the occurrences based on contract terms Answer: Recognition basis

Recognition basis defines how deferred revenue is spread across the schedule periods (occurrences). It controls the allocation method - for example, whether revenue is recognized equally across periods, based on milestones, or by specific percentages. It directly answers "how is the revenue price distributed across the schedule?" based on the terms of the contract.

Why the Other Options Are Wrong Here

Feature	Why It Doesn't Fit
Recognition convention	Controls when within a period revenue is first recognized (e.g., first day, last day, half-period). It governs timing of the first occurrence, not date determination or allocation across occurrences.
Post contract support (PCS)	Relates to support obligations bundled with a sale (like ongoing maintenance). It's a type of performance obligation, not a scheduling or allocation mechanism.

Common Misconceptions

Confusing Recognition convention with Automatic contract terms: Students often think "convention" implies system-driven automation. It doesn't - it only governs the start point of recognition timing, not date calculation.
Confusing Recognition basis with Recognition convention: "Basis" = how revenue is spread; "Convention" = when in the first period recognition starts. These are frequently swapped.
Thinking PCS handles scheduling: PCS is about what is being recognized (a support element), not how the schedule dates or amounts are determined.

Topics

#revenue recognition#revenue schedules#recognition basis#automatic contract terms

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