The answer is a user-assigned managed identity. This is correct because a user-assigned managed identity is created as a standalone Azure resource, meaning it can be attached to multiple resources like a web app and a VM scale set simultaneously, and it persists independently of those resources—surviving redeployment of either one. The team can then centrally remove the identity by deleting the managed identity resource itself, without needing to modify each individual resource’s configuration. On the AZ-104 exam, this scenario tests your understanding of the difference between system-assigned and user-assigned identities; a common trap is choosing a system-assigned identity, which is tied to a single resource and cannot be shared. Remember the key distinction: system-assigned is “born with the resource and dies with it,” while user-assigned is a “standalone identity you can share across resources.”
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 web app and a VM scale set both need the same Azure identity to read secrets from Key Vault. The identity must survive redeployment, and the team wants to remove it centrally without changing each resource individually. Which identity type should they use?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
A user-assigned managed identity attached to both resources.
A user-assigned managed identity (B) is the correct choice because it is created as a standalone Azure resource, can be attached to multiple Azure resources (e.g., a web app and a VM scale set), and persists independently of those resources. This allows the identity to survive redeployment of either resource and enables centralized removal (by deleting the user-assigned identity) without needing to modify each resource individually.
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.
✗
A system-assigned managed identity on each resource.
Why it's wrong here
System-assigned identities are tied to a single resource and are removed when that resource is deleted.
✓
A user-assigned managed identity attached to both resources.
Why this is correct
A user-assigned identity is reusable across resources and can be managed independently of any single workload.
Related concept
Read the scenario before looking for a memorised answer.
✗
A service principal with a client secret stored in application settings.
Why it's wrong here
This introduces secret management overhead and does not meet the goal of eliminating stored credentials.
✗
A resource lock on the Key Vault to preserve the secret access path.
Why it's wrong here
A lock protects resources from management changes, but it does not provide an authentication identity.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse system-assigned managed identities (which are simpler but resource-bound) with user-assigned managed identities, failing to recognize that only user-assigned identities can be shared across multiple resources and survive independent redeployment.
Detailed technical explanation
How to think about this question
User-assigned managed identities are implemented as Azure Active Directory (Azure AD) service principals that are managed by Azure. When attached to a resource, Azure automatically rotates the client credentials (certificates) behind the scenes, eliminating the need for secret management. The identity's principal ID and client ID remain constant across resource redeployments, allowing consistent access control policies in Key Vault (via access policies or RBAC) that reference the identity directly.
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 company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this AZ-104 question in full detail.
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: A user-assigned managed identity attached to both resources. — A user-assigned managed identity (B) is the correct choice because it is created as a standalone Azure resource, can be attached to multiple Azure resources (e.g., a web app and a VM scale set), and persists independently of those resources. This allows the identity to survive redeployment of either resource and enables centralized removal (by deleting the user-assigned identity) without needing to modify each resource individually.
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
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
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. An Azure CLI script runs on a utility VM every night to create and tag resources in another subscription. The script cannot store a password or client secret, and the VM is regularly redeployed from a standard image. What is the best identity design?
hard
A.Assign a system-assigned managed identity to the utility VM
✓ B.Create a user-assigned managed identity and attach it to the utility VM
C.Create a service principal and store its secret in the VM configuration
D.Use a shared access signature to sign the Azure CLI session
Why B: Option B is correct because a user-assigned managed identity can be created once, assigned to the utility VM, and used across redeployments without storing any credentials. The script can authenticate via Azure CLI using the managed identity's client ID, and the identity persists independently of the VM's lifecycle, satisfying the requirement of no password or client secret storage.
Last reviewed: Jun 11, 2026
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