- A
HTTP action with Active Directory OAuth authentication
The HTTP action in Logic Apps can be configured with Active Directory OAuth, which handles the client credentials flow and token management.
- B
HTTP action with Managed Identity authentication
Why wrong: Managed identity is used for Azure resources to authenticate to other Azure services, not for external APIs that expect a specific Microsoft Entra ID app registration.
- C
Invoke the API through Azure API Management
Why wrong: While possible, this adds an extra component and does not directly solve the OAuth challenge without additional configuration.
- D
Use the Microsoft Entra ID OAuth 2.0 connector
Why wrong: There is no standard 'Microsoft Entra ID OAuth 2.0 connector' for calling external APIs; the HTTP action's built-in authentication is the recommended approach.
AZ-204 Practice Question: Connect to and consume Azure services and third-party services
This AZ-204 practice question tests your understanding of connect to and consume azure services and third-party services. 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.
You are building an Azure Logic App that needs to call an external API secured with OAuth 2.0 client credentials flow. You have registered an application in Microsoft Entra ID with client ID 'myClientId' and client secret stored in Key Vault. Which action should you use to authenticate?
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
HTTP action with Active Directory OAuth authentication
Option A is correct because the HTTP action in Azure Logic Apps supports an 'Active Directory OAuth' authentication type that directly implements the OAuth 2.0 client credentials flow. By providing the tenant ID, client ID, and referencing the client secret from Key Vault (via a secure parameter or connection reference), the Logic App can obtain an access token from Microsoft Entra ID and authenticate to the external API without custom code.
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.
- ✓
HTTP action with Active Directory OAuth authentication
Why this is correct
The HTTP action in Logic Apps can be configured with Active Directory OAuth, which handles the client credentials flow and token management.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
HTTP action with Managed Identity authentication
Why it's wrong here
Managed identity is used for Azure resources to authenticate to other Azure services, not for external APIs that expect a specific Microsoft Entra ID app registration.
- ✗
Invoke the API through Azure API Management
Why it's wrong here
While possible, this adds an extra component and does not directly solve the OAuth challenge without additional configuration.
- ✗
Use the Microsoft Entra ID OAuth 2.0 connector
Why it's wrong here
There is no standard 'Microsoft Entra ID OAuth 2.0 connector' for calling external APIs; the HTTP action's built-in authentication is the recommended approach.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse the 'Managed Identity' option (which works only for Azure resources that accept Microsoft Entra ID tokens directly) with the need to authenticate to an external third-party API, or they mistakenly look for a dedicated 'OAuth 2.0 connector' instead of using the HTTP action's built-in authentication type.
Detailed technical explanation
How to think about this question
The HTTP action's 'Active Directory OAuth' authentication type under the hood constructs a token request to the Microsoft Entra ID token endpoint (https://login.microsoftonline.com/{tenantId}/oauth2/v2.0/token) using the client credentials grant (grant_type=client_credentials). It automatically caches the token and handles refresh, but note that the client secret must be stored securely—typically in Key Vault and referenced via a Logic App secure parameter or a connection reference to avoid exposing it in the workflow definition.
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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Connect to and consume Azure services and third-party services — study guide chapter
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FAQ
Questions learners often ask
What does this AZ-204 question test?
Connect to and consume Azure services and third-party services — This question tests Connect to and consume Azure services and third-party services — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: HTTP action with Active Directory OAuth authentication — Option A is correct because the HTTP action in Azure Logic Apps supports an 'Active Directory OAuth' authentication type that directly implements the OAuth 2.0 client credentials flow. By providing the tenant ID, client ID, and referencing the client secret from Key Vault (via a secure parameter or connection reference), the Logic App can obtain an access token from Microsoft Entra ID and authenticate to the external API without custom code.
What should I do if I get this AZ-204 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-204 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-204 exam.
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