- A
A local user account in each resource group
Why wrong: Resource groups do not host user accounts, so this is not a valid identity option.
- B
A guest user account
A guest user lets the person sign in with their own organization account while being invited into your tenant.
- C
A managed identity
Why wrong: Managed identities are for Azure resources to access other services, not for human partner users.
- D
A new service principal
Why wrong: Service principals represent applications or automation, not interactive human users.
Question 833 of 1,170
AZ-104 Manage Azure Identities and Governance Practice Question
This AZ-104 practice question tests your understanding of manage azure identities and governance. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. 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 partner company needs a developer to access resources in your tenant by using the developer's existing work account. You do not want to create a new separate username and password for that person. What should you create in Microsoft Entra ID?
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
✓
A guest user account
B is correct because Microsoft Entra ID B2B collaboration allows you to invite an external user's existing work account as a guest user. This grants access to resources without creating a new username and password, as the developer authenticates using their home tenant credentials. Guest users are managed in Entra ID and can be assigned permissions via Azure RBAC or group membership.
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 local user account in each resource group
Why it's wrong here
Resource groups do not host user accounts, so this is not a valid identity option.
When this WOULD be correct
This option would be correct if the question asked about granting permissions to a specific resource group for a user who already has an account in the same tenant, and the task was to assign RBAC roles directly to that user at the resource group scope.
- ✓
A guest user account
Why this is correct
A guest user lets the person sign in with their own organization account while being invited into your tenant.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
A managed identity
Why it's wrong here
Managed identities are for Azure resources to access other services, not for human partner users.
When this WOULD be correct
A managed identity would be correct if the question asked: 'You need to allow a virtual machine to access Azure Key Vault without storing credentials in code. What should you create?'
- ✗
A new service principal
Why it's wrong here
Service principals represent applications or automation, not interactive human users.
When this WOULD be correct
A service principal would be correct if the question asked: 'You need to allow an automated script running in a partner's Azure subscription to access resources in your tenant. What should you create?' In that case, a service principal provides a secure identity for the script without requiring a user account.
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.
✓A guest user accountCorrect answer▾
Why this is correct
A guest user lets the person sign in with their own organization account while being invited into your tenant.
✗A local user account in each resource groupWrong answer — click to see why▾
Why this is wrong here
Local user accounts in resource groups are not supported in Azure; user accounts are managed at the tenant level in Microsoft Entra ID, not per resource group. Creating a local account would also require managing separate credentials, contradicting the requirement to use the developer's existing work account.
★ When this WOULD be the correct answer
This option would be correct if the question asked about granting permissions to a specific resource group for a user who already has an account in the same tenant, and the task was to assign RBAC roles directly to that user at the resource group scope.
Why candidates choose this
Candidates may think that creating a user account within a resource group is a way to provide access without affecting the entire tenant, not realizing that Azure AD user accounts are tenant-wide and resource groups do not have their own user directory.
✗A managed identityWrong answer — click to see why▾
Why this is wrong here
A managed identity is an Azure resource identity used for authenticating to Azure services without storing credentials, not for inviting external users. It cannot be used to grant access to a partner's existing work account.
★ When this WOULD be the correct answer
A managed identity would be correct if the question asked: 'You need to allow a virtual machine to access Azure Key Vault without storing credentials in code. What should you create?'
Why candidates choose this
Candidates may confuse managed identities with guest accounts because both involve identity without password management, but managed identities are for Azure resources, not external users.
✗A new service principalWrong answer — click to see why▾
Why this is wrong here
A service principal is an identity for applications or automated tools, not for individual users. The question requires granting access to a specific developer using their existing work account, which is a user-to-user collaboration scenario, not an application identity scenario.
★ When this WOULD be the correct answer
A service principal would be correct if the question asked: 'You need to allow an automated script running in a partner's Azure subscription to access resources in your tenant. What should you create?' In that case, a service principal provides a secure identity for the script without requiring a user account.
Why candidates choose this
Candidates may confuse service principals with guest users because both involve external access. They might think a service principal is needed for any external identity, overlooking that service principals are for applications, not individual users.
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?”
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse a guest user (B2B collaboration) with a service principal or managed identity, thinking any external access requires a non-user identity, but the question explicitly asks for a user account using an existing work account.
Detailed technical explanation
How to think about this question
Guest users in Entra ID B2B use cross-tenant trust via SAML 2.0 or OpenID Connect, allowing the developer to authenticate in their home tenant while receiving an access token scoped to the resource tenant. The guest user object is created in the resource tenant with a UserType of 'Guest', and permissions are assigned through Azure RBAC roles or Azure AD directory roles. A real-world scenario is granting a partner developer contributor access to a specific resource group without managing their credentials.
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.
Quick reference
Access Control Model Comparison
| Model | Acronym | Who Controls Access? | Best For |
|---|---|---|---|
| Discretionary Access Control | DAC | Resource owner | Small teams, file shares |
| Mandatory Access Control | MAC | System / security labels | Classified govt / military |
| Role-Based Access Control | RBAC | Administrator (via roles) | Enterprise environments |
| Attribute-Based Access Control | ABAC | Policy engine (user + resource attributes) | Fine-grained, dynamic policies |
| Rule-Based Access Control | RuBAC | System rules / ACLs | Firewall rules, network ACLs |
What to study next
Got this wrong? Here's your next step.
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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: A guest user account — B is correct because Microsoft Entra ID B2B collaboration allows you to invite an external user's existing work account as a guest user. This grants access to resources without creating a new username and password, as the developer authenticates using their home tenant credentials. Guest users are managed in Entra ID and can be assigned permissions via Azure RBAC or group membership.
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
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