- A
A custom RBAC role that removes the create action for virtual machines.
Why wrong: RBAC can block creation, but it cannot evaluate whether a deployment includes the required tag.
- B
An Azure Policy assignment with a deny or audit effect for the tag requirement.
Azure Policy is the correct control because the requirement is about resource compliance, not user authorization. A policy can deny deployments that do not include the approved tag and can also audit existing resources to show which ones are noncompliant. That separates governance enforcement from RBAC, which only decides who is allowed to perform actions in Azure.
- C
A resource lock on the resource group.
Why wrong: A lock does not check whether the correct tag is present and would not provide compliance reporting.
- D
An Entra ID dynamic group for the VM creators.
Why wrong: Group membership helps manage access, but it does not enforce deployment rules or resource tagging.
Quick Answer
The answer is an Azure Policy assignment with a deny or audit effect for the tag requirement. The deny effect actively blocks creation of any virtual machine that lacks the approved tag, enforcing compliance at deployment time, while the audit effect flags existing non-compliant resources without disrupting them, giving you a clear compliance report. On the AZ-104 exam, this scenario tests your understanding of Azure Policy effects and their distinct roles—deny for prevention, audit for discovery—and a common trap is assuming a single effect can do both. Remember, deny stops the action, audit shows the problem. A quick memory tip: "Deny the new, audit the old" helps you pair the right effect to each requirement.
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 team can already deploy virtual machines, but they want to prevent users from creating VMs unless the deployment includes an approved tag. They also want to see which existing resources do not meet the rule. What should the administrator use?
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
An Azure Policy assignment with a deny or audit effect for the tag requirement.
Azure Policy with a 'deny' effect prevents creation of VMs that lack the required tag, while the 'audit' effect identifies non-compliant existing resources without blocking them. This directly addresses both requirements: enforcing the tag on new deployments and discovering which existing resources violate the rule.
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 custom RBAC role that removes the create action for virtual machines.
Why it's wrong here
RBAC can block creation, but it cannot evaluate whether a deployment includes the required tag.
- ✓
An Azure Policy assignment with a deny or audit effect for the tag requirement.
Why this is correct
Azure Policy is the correct control because the requirement is about resource compliance, not user authorization. A policy can deny deployments that do not include the approved tag and can also audit existing resources to show which ones are noncompliant. That separates governance enforcement from RBAC, which only decides who is allowed to perform actions in Azure.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
A resource lock on the resource group.
Why it's wrong here
A lock does not check whether the correct tag is present and would not provide compliance reporting.
- ✗
An Entra ID dynamic group for the VM creators.
Why it's wrong here
Group membership helps manage access, but it does not enforce deployment rules or resource tagging.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is confusing Azure Policy (which enforces rules on resource properties like tags) with RBAC (which controls who can perform actions), leading candidates to mistakenly choose a custom role instead of the policy-based solution.
Detailed technical explanation
How to think about this question
Azure Policy uses a JSON-based policy definition with an 'if/then' rule structure; the 'if' condition checks for the absence of a tag (e.g., `"field": "tags['CostCenter']"` with `"exists": "false"`), and the 'then' effect can be 'deny' (for new deployments) or 'audit' (for existing resources). The policy is assigned at a management group, subscription, or resource group scope and is evaluated during resource creation via Azure Resource Manager, making it a gatekeeper for compliance. In a real-world scenario, an organization might combine a 'deny' effect for production subscriptions and an 'audit' effect for development subscriptions to gradually enforce tagging standards.
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.
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: An Azure Policy assignment with a deny or audit effect for the tag requirement. — Azure Policy with a 'deny' effect prevents creation of VMs that lack the required tag, while the 'audit' effect identifies non-compliant existing resources without blocking them. This directly addresses both requirements: enforcing the tag on new deployments and discovering which existing resources violate the rule.
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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