This MB-920 practice question tests your understanding of describe the core capabilities of the finance and operations apps. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A project-based organization uses Dynamics 365 Project Operations. They need to track time and materials against a project and invoice the customer based on actuals. Which project contract billing method should they use?
Time and material
Time and material invoices based on actual time and expenses.
Cost plus
Why wrong: Cost plus is a cost reimbursement model.
Fixed price
Why wrong: Fixed price bills a fixed amount, not based on actuals.
Milestone billing
Why wrong: Milestone billing is based on project milestones, not actuals.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Time and material
A is correct because the Time and Material billing method in Dynamics 365 Project Operations allows the organization to track actual hours and expenses against a project and invoice the customer based on those actuals. This method is designed for projects where the scope is not fully defined upfront, and billing is directly tied to the recorded time and material consumption.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Time and material
Why this is correct
Time and material invoices based on actual time and expenses.
Related concept
Read the scenario before looking for a memorised answer.
Cost plus
Why it's wrong here
Cost plus is a cost reimbursement model.
Fixed price
Why it's wrong here
Fixed price bills a fixed amount, not based on actuals.
Milestone billing
Why it's wrong here
Milestone billing is based on project milestones, not actuals.
Common exam traps
The trap here is that candidates often confuse Time and Material with Cost plus, thinking both are based on actuals, but Cost plus typically involves a negotiated fee structure rather than direct billing of tracked time and materials.
Detailed technical explanation
In Dynamics 365 Project Operations, the Time and Material billing method uses actuals (time entries, expense reports, material usage) to generate invoices automatically through the billing run process. This method integrates with the project’s cost and revenue recognition, ensuring that invoices reflect real-time consumption, which is critical for projects with evolving scopes like consulting or professional services.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
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FAQ
Describe the core capabilities of the finance and operations apps — This question tests Describe the core capabilities of the finance and operations apps — Read the scenario before looking for a memorised answer..
The correct answer is: Time and material — A is correct because the Time and Material billing method in Dynamics 365 Project Operations allows the organization to track actual hours and expenses against a project and invoice the customer based on those actuals. This method is designed for projects where the scope is not fully defined upfront, and billing is directly tied to the recorded time and material consumption.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 24, 2026
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