- A
Use the HTTP connector. In the connector's authentication settings, choose 'Managed Identity' and select the system-assigned identity. Set the audience to the API's Application ID URI.
Correct: HTTP connector supports managed identity authentication.
- B
Use the HTTP connector with 'Active Directory OAuth' authentication. Provide the client ID and client secret of a service principal.
Why wrong: Incorrect: uses service principal secret, not managed identity.
- C
Use the custom connector. In the custom connector's authentication, choose 'Managed Identity' and provide the managed identity's principal ID.
Why wrong: Incorrect: custom connector is unnecessary; HTTP connector works.
- D
Use the Azure API Management connector. Configure it to use OAuth 2.0 with the managed identity.
Why wrong: Incorrect: API Management is not needed; HTTP connector suffices.
Quick Answer
The answer is to use the HTTP connector with Managed Identity authentication. This is correct because the HTTP connector is the only generic connector that supports the 'Managed Identity' authentication type, allowing the Logic App to obtain an OAuth 2.0 token from Microsoft Entra ID without storing or rotating any client secrets. When you select 'Managed Identity' in the connector's authentication settings, you choose the system-assigned identity and set the audience to the API's Application ID URI, which tells Microsoft Entra ID which resource the token is for. On the AZ-204 exam, this scenario tests your understanding of how to securely authenticate from a Logic App to an API registered in the same tenant, and a common trap is choosing 'Active Directory OAuth' instead—that option requires explicit client credentials, defeating the purpose of a managed identity. Remember the memory tip: "HTTP + Managed Identity = No secrets, just tokens."
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. 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.
Tailwind Traders uses Azure Logic Apps to orchestrate a multi-step business process. The workflow must call an external REST API that requires OAuth 2.0 authentication. The API is registered in Microsoft Entra ID. The Logic App must authenticate using a system-assigned managed identity. The API's app registration has been configured to accept tokens from the managed identity. Which connector should the team use in the Logic App to call the API, and how should they configure authentication?
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
Use the HTTP connector. In the connector's authentication settings, choose 'Managed Identity' and select the system-assigned identity. Set the audience to the API's Application ID URI.
Use the HTTP connector with 'Managed Identity' authentication type. Select the system-assigned identity. Option A is correct. Option B uses 'Active Directory OAuth' which requires client credentials. Option C uses API Management, unnecessary. Option D uses custom connector, overkill.
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.
- ✓
Use the HTTP connector. In the connector's authentication settings, choose 'Managed Identity' and select the system-assigned identity. Set the audience to the API's Application ID URI.
Why this is correct
Correct: HTTP connector supports managed identity authentication.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Use the HTTP connector with 'Active Directory OAuth' authentication. Provide the client ID and client secret of a service principal.
Why it's wrong here
Incorrect: uses service principal secret, not managed identity.
- ✗
Use the custom connector. In the custom connector's authentication, choose 'Managed Identity' and provide the managed identity's principal ID.
Why it's wrong here
Incorrect: custom connector is unnecessary; HTTP connector works.
- ✗
Use the Azure API Management connector. Configure it to use OAuth 2.0 with the managed identity.
Why it's wrong here
Incorrect: API Management is not needed; HTTP connector suffices.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Detailed technical explanation
How to think about this question
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
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.
- Use explanations to understand the rule behind the answer.
TExam Day Tips
- Underline the problem statement mentally.
- 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 AZ-204 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
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Connect to and consume Azure services and third-party services — study guide chapter
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Connect to and consume Azure services and third-party services practice questions
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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: Use the HTTP connector. In the connector's authentication settings, choose 'Managed Identity' and select the system-assigned identity. Set the audience to the API's Application ID URI. — Use the HTTP connector with 'Managed Identity' authentication type. Select the system-assigned identity. Option A is correct. Option B uses 'Active Directory OAuth' which requires client credentials. Option C uses API Management, unnecessary. Option D uses custom connector, overkill.
What should I do if I get this AZ-204 question wrong?
Identify which AZ-204 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
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 20, 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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