MB-310 Practice Question: Implement Accounts Receivable, Credit, Collections, and Subscription Billing
A subscription billing company sells a monthly service. A customer is billed on the first day of each month and pays on the fifteenth. The company wants to recognize revenue evenly across the month and automatically create the billing schedule for the next twelve months when a sales order is confirmed. Which feature should the functional consultant configure?
⚠ Common exam trap
Many exam-takers confuse recurring free text invoices or project billing rules with subscription billing's billing schedule and revenue recognition schedule, which are distinct features.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Revenue recognition with a billing schedule, using a billing schedule group with a monthly recurrence and a revenue recognition schedule that spreads revenue across the period.
Subscription billing is configured with billing schedules that generate future billing lines automatically when a sales order is confirmed, and revenue recognition schedules that defer and recognize revenue across the service period. A billing schedule group with a monthly recurrence produces the twelve monthly billings, and the revenue recognition schedule ensures even recognition. The other options use unrelated features that do not provide both capabilities.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
A project contract with a fixed-price billing rule and a milestone that recognizes revenue on a straight-line basis over twelve months.
Why it's wrong here
Project contracts and billing rules are used for project revenue, not for subscription billing of a service item. While a project can recognize revenue on a straight-line basis, it does not automatically create a sales order billing schedule for a subscription. This is the wrong module and does not meet the scenario's requirement for automatic billing schedule creation from a sales order.
- ✗
A recurring free text invoice template with a monthly interval and a posting profile that defers revenue to a balance sheet account.
Why it's wrong here
Recurring free text invoices generate invoices on a schedule but do not create a billing schedule tied to a sales order, nor do they provide the revenue recognition schedule that spreads revenue evenly. Posting to a balance sheet account alone does not recognize revenue across the period. This approach does not satisfy the automatic billing schedule and even revenue recognition needs.
- ✓
Revenue recognition with a billing schedule, using a billing schedule group with a monthly recurrence and a revenue recognition schedule that spreads revenue across the period.
Why this is correct
Subscription billing in Dynamics 365 Finance uses billing schedules to generate future billing lines and revenue recognition schedules to defer and recognize revenue. A billing schedule group with a monthly recurrence creates the twelve future billing lines, and the revenue recognition schedule spreads revenue across each period. This meets both the automatic schedule creation and even revenue recognition requirements.
- ✗
A sales agreement with a monthly commitment and a rebate program that generates invoices and defers revenue automatically.
Why it's wrong here
Sales agreements manage commitments and rebates; they do not create billing schedules or revenue recognition schedules for subscription billing. Rebates are a separate accrual and settlement process, not a revenue deferral mechanism. This configuration would not generate the twelve future billing lines or spread revenue evenly across each month.
About these practice questions
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
This MB-310 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MB-310 exam.