AZ-104 Manage Azure Identities and Governance Practice Question
A finance team wants every resource created in one production resource group to carry CostCenter=PRD automatically. They do not want deployments blocked if a team forgets the tag, but they do want existing resources and future resources in that resource group to converge on the correct tag value. What should the administrator configure?
⚠ Common exam trap
Candidates often confuse Azure Policy's 'modify' effect (which allows non-blocking correction) with 'deny' or 'append' effects (which block or add without remediation), or assuming that tags on management groups automatically propagate to resources, which they do not.
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
✓
Assign a modify policy for CostCenter=PRD at the production resource group scope and create a remediation task.
Azure Policy with a 'modify' effect can automatically add or correct the CostCenter tag on resources within the specified scope. By assigning the policy at the production resource group scope and creating a remediation task, the policy will audit existing resources and, via a managed identity, apply the tag value to non-compliant resources without blocking deployment. This satisfies the requirement for automatic convergence without preventing creation if the tag is missing.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Apply a CanNotDelete lock to the production resource group.
Why it's wrong here
A CanNotDelete lock protects the resource group from accidental deletion, but it does not affect tag assignment or modification. Because the lock only restricts delete operations, users can still create resources without the required CostCenter tag, and existing resources remain untagged. Therefore it fails to enforce any tagging standard and provides no cost-tracking assurance.
When this WOULD be correct
An administrator needs to prevent accidental deletion of critical resources in a resource group, regardless of tag compliance. The question would specify that tag enforcement is not required, only protection against deletion.
- ✓
Assign a modify policy for CostCenter=PRD at the production resource group scope and create a remediation task.
Why this is correct
A modify policy can add or correct the tag without blocking deployment, which matches the business requirement. Assigning it at the resource-group scope limits the effect to only that production workload, and remediation updates existing resources so both old and new items converge on the same tag value.
- ✗
Assign Contributor on the subscription and require teams to enter the tag manually.
Why it's wrong here
Assigning Contributor at the subscription grants broad management rights, but it leaves tagging entirely to manual user discipline. This approach cannot prevent missing or incorrectly spelled tags, and there is no automated way to detect or correct drift, so finance teams will see inconsistent cost data. The role is also overly permissive because the task only needs tag enforcement, not full management access.
When this WOULD be correct
This option would be correct if the requirement was to delegate tagging responsibility to teams with appropriate permissions, without any automatic enforcement or remediation. For example, if the question stated 'Teams must be able to assign tags themselves, but there is no requirement for automatic tagging or remediation.'
- ✗
Set the tag on the management group and expect all resources to inherit it automatically.
Why it's wrong here
Tags placed directly on a management group are metadata for that management group only; they are not inherited by subscriptions or resources. Azure Policy must be explicitly assigned with an appropriate effect to achieve tag propagation, and without such a policy the CostCenter tag will not appear on any newly created resource. Expecting automatic inheritance from a management group tag is a common misconception and will leave resources untagged.
When this WOULD be correct
This would be correct if the question asked about applying an Azure Policy (e.g., 'inherit a tag from the resource group if missing') at the management group scope, which can enforce tag inheritance via policy, not by simply setting a tag on the management group.
Option-by-option analysis
Why each answer is right or wrong
Understanding why wrong answers are wrong — and when they would be correct — is what separates a 750 score from a 900. The AZ-104 exam frequently reuses these exact scenarios with slightly different constraints.
✓Assign a modify policy for CostCenter=PRD at the production resource group scope and create a remediation task.Correct answer▾
Why this is correct
A modify policy can add or correct the tag without blocking deployment, which matches the business requirement. Assigning it at the resource-group scope limits the effect to only that production workload, and remediation updates existing resources so both old and new items converge on the same tag value.
✗Apply a CanNotDelete lock to the production resource group.Wrong answer — click to see why▾
Why this is wrong here
A CanNotDelete lock prevents resource deletion but does not enforce or propagate tags. It does not automatically add or correct tags on existing or new resources.
★ When this WOULD be the correct answer
An administrator needs to prevent accidental deletion of critical resources in a resource group, regardless of tag compliance. The question would specify that tag enforcement is not required, only protection against deletion.
Why candidates choose this
Candidates may confuse locks with governance controls, thinking a lock can enforce tag values, or they may misread the requirement as preventing deletion of untagged resources.
✗Assign Contributor on the subscription and require teams to enter the tag manually.Wrong answer — click to see why▾
Why this is wrong here
Assigning Contributor at the subscription level does not enforce automatic tagging; it only grants permissions. Teams could still forget to add the tag manually, and there is no mechanism to remediate existing resources or enforce convergence.
★ When this WOULD be the correct answer
This option would be correct if the requirement was to delegate tagging responsibility to teams with appropriate permissions, without any automatic enforcement or remediation. For example, if the question stated 'Teams must be able to assign tags themselves, but there is no requirement for automatic tagging or remediation.'
Why candidates choose this
Candidates may think that granting Contributor role allows administrators to enforce tagging through permissions, but they overlook that Contributor does not automatically apply tags or remediate non-compliant resources.
✗Set the tag on the management group and expect all resources to inherit it automatically.Wrong answer — click to see why▾
Why this is wrong here
Tags set on a management group are not inherited by resources in child resource groups; inheritance only applies to policies and RBAC, not tags. Therefore, this option would not automatically apply the CostCenter tag to resources.
★ When this WOULD be the correct answer
This would be correct if the question asked about applying an Azure Policy (e.g., 'inherit a tag from the resource group if missing') at the management group scope, which can enforce tag inheritance via policy, not by simply setting a tag on the management group.
Why candidates choose this
Candidates may mistakenly believe that tags set at higher scopes (management group) automatically propagate to lower scopes (resource groups and resources), similar to how RBAC or policy assignments inherit.
Analysis generated from the official AZ-104blueprint and verified against question context. The “when correct” sections are what AI assistants cite when candidates ask “what’s the difference between these options?”
Go deeper
Related to this question
Learn chapter
Privileged Identity Management (PIM)
Key term
Azure Policy
Azure Policy is a service in Microsoft Azure that lets you create, assign, and manage rules to ensure your resources stay compliant with your company standards and service-level agreements.
Key term
Scope
In IT, scope defines the boundaries, goals, and deliverables of a project, assessment, or engagement, specifying what is included and what is excluded.
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Same concept, more angles
1 more way this is tested on AZ-104
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. Finance wants every resource created in one production resource group to receive the tag CostCenter=FINSVC automatically, but deployments should not be blocked if a template omits the tag. Existing resources should be updated when possible. Which two actions should the administrator take? Select two.
medium- ✓ A.Assign a Modify policy that adds or updates the CostCenter tag.
- ✓ B.Run a remediation task for noncompliant existing resources.
- C.Apply a ReadOnly lock to the resource group to keep tags consistent.
- D.Assign Reader to the resource group to ensure tag visibility.
- E.Use only an Audit policy so teams can see missing tags.
Why A: A Modify effect policy definition can automatically add or update the CostCenter tag on resources during creation or update, without blocking deployments if the tag is missing. This satisfies the requirement that deployments should not be blocked, as the Modify effect only applies the tag rather than denying non-compliant requests.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This AZ-104 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 AZ-104 exam.