- A
Deny
Deny is the correct enforcement effect when you want Azure to stop noncompliant deployments, such as resources created outside the approved regions.
- B
Audit
Audit records noncompliance without blocking the resource operation. That makes it appropriate for reporting existing resources missing the CostCenter tag.
- C
Modify
Why wrong: Modify is used to change supported resource properties during deployment. It does not directly express the requirement to block disallowed regions or simply report missing tags.
- D
DeployIfNotExists
Why wrong: DeployIfNotExists is for remediating missing child resources or settings, not for preventing resource creation in an unapproved region.
- E
Disabled
Why wrong: Disabled turns the policy effect off, so it would not enforce regions or record noncompliant resources. It defeats the stated governance requirement.
Quick Answer
The answer is Deny and Audit. Deny is correct because it actively blocks resource creation in regions outside East US and West US by evaluating the location property against an allowed list and rejecting non-compliant requests at deployment time, enforcing a hard region restriction. Audit is correct because it logs a compliance event for existing resources missing the CostCenter tag without blocking any operations, providing the security team with a nonblocking report of tag gaps. On the AZ-104 exam, this tests your understanding of Azure Policy effects and their behavioral differences—Deny for proactive enforcement, Audit for passive visibility. A common trap is choosing Append or Modify for the tag report, but those alter resources, whereas Audit simply reports without changes. Remember the memory tip: Deny draws a line in the sand, Audit shines a light on what’s already there.
AZ-104 Manage Azure Identities and Governance Practice Question
This AZ-104 practice question tests your understanding of manage azure identities and governance. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. 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 subscription must block creation of resources in any region except East US and West US, and the security team also wants a nonblocking report of existing resources that are missing a CostCenter tag. Which two Azure Policy effects should you use? Select two.
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
Deny
Deny is correct because it actively blocks resource creation in regions outside East US and West US by evaluating the location property against an allowed list and rejecting non-compliant requests at deployment time. Audit is correct because it logs a compliance event for existing resources missing the CostCenter tag without blocking any operations, providing a nonblocking report for the security team.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Deny
Why this is correct
Deny is the correct enforcement effect when you want Azure to stop noncompliant deployments, such as resources created outside the approved regions.
Related concept
Read the scenario before looking for a memorised answer.
- ✓
Audit
Why this is correct
Audit records noncompliance without blocking the resource operation. That makes it appropriate for reporting existing resources missing the CostCenter tag.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Modify
Why it's wrong here
Modify is used to change supported resource properties during deployment. It does not directly express the requirement to block disallowed regions or simply report missing tags.
- ✗
DeployIfNotExists
Why it's wrong here
DeployIfNotExists is for remediating missing child resources or settings, not for preventing resource creation in an unapproved region.
- ✗
Disabled
Why it's wrong here
Disabled turns the policy effect off, so it would not enforce regions or record noncompliant resources. It defeats the stated governance requirement.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse Audit (which only reports) with DeployIfNotExists or Modify (which actively remediate), leading them to select a remediation effect when the question explicitly asks for a nonblocking report.
Detailed technical explanation
How to think about this question
Under the hood, Azure Policy uses a JSON-based policy definition with an 'if/then' structure; the Deny effect triggers a 403 Forbidden response during resource creation via Azure Resource Manager, while Audit writes a compliance state of 'NonCompliant' to the policy evaluation logs without altering the resource. In real-world scenarios, combining Deny for region control and Audit for tag reporting allows security teams to enforce strict boundaries while gathering data for future remediation without disrupting existing workloads.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
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.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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Manage Azure Identities and Governance — study guide chapter
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FAQ
Questions learners often ask
What does this AZ-104 question test?
Manage Azure Identities and Governance — This question tests Manage Azure Identities and Governance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Deny — Deny is correct because it actively blocks resource creation in regions outside East US and West US by evaluating the location property against an allowed list and rejecting non-compliant requests at deployment time. Audit is correct because it logs a compliance event for existing resources missing the CostCenter tag without blocking any operations, providing a nonblocking report for the security team.
What should I do if I get this AZ-104 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
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Last reviewed: Jun 11, 2026
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.
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