MS-900 Practice Question: Describe Microsoft 365 pricing, licensing, and support
Your organization is deploying Microsoft 365 for a subsidiary with 1,000 users. The subsidiary needs to be billed separately. Which licensing model should you use?
⚠ Common exam trap
MS-900 often tests the misconception that separate billing requires a separate tenant, but Microsoft 365 supports multiple subscriptions with distinct billing profiles within a single tenant, allowing separate invoicing without sacrificing centralized management.
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
✓
Create separate subscriptions in the same tenant with different billing profiles
The correct approach is to create separate subscriptions within the same Microsoft 365 tenant, each with its own billing profile. This allows the subsidiary to be billed separately while still benefiting from centralized administration, shared services (like Microsoft Entra ID), and unified management. Billing profiles in Microsoft 365 let you assign different payment methods and invoice recipients for different subscriptions, so the subsidiary can have its own billing without needing a separate tenant.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Create separate subscriptions in the same tenant with different billing profiles
Why this is correct
Separate subscriptions within one tenant let you attach distinct billing profiles, so the subsidiary's 1,000 licences invoice independently while users stay in a single Microsoft Entra ID tenant. This satisfies the separate-billing constraint without provisioning a second tenant, which would duplicate identity management and complicate collaboration.
- ✗
Create a separate Microsoft 365 tenant for the subsidiary
Why it's wrong here
A separate tenant creates a distinct directory and billing boundary, but the subsidiary's users then sit outside the parent's tenant, complicating shared services and administration. It is tempting for full isolation, and would suit a legally independent entity needing its own identity infrastructure.
- ✗
Use a Microsoft Enterprise Agreement for the entire organization
Why it's wrong here
An Enterprise Agreement covers the whole organisation under one enrolment and billing, so the subsidiary cannot be invoiced separately. It is tempting because it offers volume pricing and central administration, and would suit a parent company licensing all entities together.
- ✗
Create a single Microsoft 365 tenant with multiple subscriptions
Why it's wrong here
Multiple subscriptions within one tenant still bill to the same tenant's billing account, so separate invoicing for the subsidiary is not achieved. It is tempting because subscriptions allow mixed licence types, and would suit consolidating several product purchases under one payer.
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Microsoft To Do and Task Management
Key term
Microsoft 365
Microsoft 365 is a subscription-based cloud service from Microsoft that combines productivity tools like Office apps with security, device management, and online storage.
Key term
Microsoft 365 tenant
A Microsoft 365 tenant is a dedicated, isolated instance of Microsoft 365 services created for an organization when they sign up for a subscription.
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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
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