- A
Separate resource groups for production and sandbox workloads in each subscription.
Why wrong: Resource groups help organize resources inside a subscription, but they do not create subscription-wide governance inheritance.
- B
A management group hierarchy with production and sandbox child management groups, then assign governance at the appropriate scope.
Management groups provide a hierarchy for organizing subscriptions and applying governance that inherits to child scopes. Placing production and sandbox subscriptions under different child management groups lets central IT target different controls once, and the settings flow automatically to future subscriptions placed in those groups.
- C
A CanNotDelete lock on each subscription.
Why wrong: A lock only prevents deletion of the locked scope and does not organize subscriptions or differentiate production from sandbox governance.
- D
A custom role assigned to each subscription owner.
Why wrong: Custom roles control user permissions, not the structural inheritance of governance rules across subscriptions.
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.
New Azure subscriptions are created every month. Production subscriptions require stricter governance than sandbox subscriptions, and central IT wants those rules to apply automatically to any future production subscription without reconfiguring each one. What should they set up?
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 management group hierarchy with production and sandbox child management groups, then assign governance at the appropriate scope.
Management groups allow you to build a hierarchy that reflects your organizational structure and apply governance policies (e.g., Azure Policy, RBAC) at the management group scope. By creating a 'Production' child management group under the root, any new subscription placed in that group automatically inherits the assigned policies and role assignments, eliminating the need to reconfigure each subscription 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.
- ✗
Separate resource groups for production and sandbox workloads in each subscription.
Why it's wrong here
Resource groups help organize resources inside a subscription, but they do not create subscription-wide governance inheritance.
- ✓
A management group hierarchy with production and sandbox child management groups, then assign governance at the appropriate scope.
Why this is correct
Management groups provide a hierarchy for organizing subscriptions and applying governance that inherits to child scopes. Placing production and sandbox subscriptions under different child management groups lets central IT target different controls once, and the settings flow automatically to future subscriptions placed in those groups.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
A CanNotDelete lock on each subscription.
Why it's wrong here
A lock only prevents deletion of the locked scope and does not organize subscriptions or differentiate production from sandbox governance.
- ✗
A custom role assigned to each subscription owner.
Why it's wrong here
Custom roles control user permissions, not the structural inheritance of governance rules across subscriptions.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse resource groups or locks with management groups, failing to realize that only management groups provide hierarchical inheritance of governance across multiple subscriptions without per-subscription configuration.
Detailed technical explanation
How to think about this question
Azure Management Groups support up to 10,000 management groups in a single directory and can be nested up to six levels deep. Policies assigned at a management group scope are inherited by all child subscriptions and resource groups, and this inheritance is evaluated at policy assignment time, not at subscription creation time, ensuring consistent enforcement. The root management group (Tenant Root Group) can be used to assign policies that apply to every subscription in the tenant, but best practice is to use child management groups for granular control.
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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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 management group hierarchy with production and sandbox child management groups, then assign governance at the appropriate scope. — Management groups allow you to build a hierarchy that reflects your organizational structure and apply governance policies (e.g., Azure Policy, RBAC) at the management group scope. By creating a 'Production' child management group under the root, any new subscription placed in that group automatically inherits the assigned policies and role assignments, eliminating the need to reconfigure each subscription 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
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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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