MS-102 Deploy and manage a Microsoft 365 tenant Practice Question
An administrator needs to add a custom domain 'contoso.org' to their Microsoft 365 tenant. They have already purchased the domain and have access to the DNS registrar. What is the first step the administrator should perform in the Microsoft 365 admin center?
⚠ Common exam trap
Test-takers frequently confuse the sequence of steps and think that adding a DNS record (like TXT or MX) is the first action, when in reality the domain must first be registered in the admin center to obtain the required verification token.
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
✓
Add the domain in the Microsoft 365 admin center
The first step to add a custom domain to a Microsoft 365 tenant is to initiate the domain addition process in the Microsoft 365 admin center. This triggers Microsoft to generate the unique verification TXT record that must be published in the public DNS zone. Without first adding the domain in the admin center, the administrator would not know the specific verification string required for the TXT record.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Add a TXT record in the public DNS zone
Why it's wrong here
Adding a TXT record in the public DNS zone is the verification step, not the initial step. Microsoft 365 first requires you to add the domain in the admin center, which generates a unique TXT value that must be placed at your DNS host. Without first adding the domain, you have no token to publish, and simply creating a TXT record does not create or associate the domain with your tenant.
- ✓
Add the domain in the Microsoft 365 admin center
Why this is correct
The first action is adding the custom domain in the Microsoft 365 admin center, which creates a domain object in Microsoft Entra ID and marks it as unverified. This step generates the exact DNS records (including the unique TXT verification string) that you will need to prove ownership. Once the domain is added, you can retrieve and then add those records — but the addition in the admin center must happen first.
- ✗
Configure email routing (MX record)
Why it's wrong here
Configuring an MX record routes email for your domain to a mail host, but doing so before the domain is added and verified would cause mail flow to Microsoft 365 before ownership is confirmed, risking bounced messages or security validation failures. Email routing is intentionally a post-verification configuration. The MX record also serves no purpose for adding the domain itself; it only affects mail delivery after the domain is proven and listed in the tenant.
- ✗
Create user accounts with the new domain
Why it's wrong here
Creating user accounts with the custom domain as their primary SMTP address requires the domain to be both added and verified in the Microsoft 365 tenant. Microsoft Entra ID enforces that only recognized, verified domains can be used in user principal names and email addresses; attempting to create accounts with an unverified domain will fail or force fallback to the initial onmicrosoft.com domain. Therefore, user provisioning is a downstream step that cannot precede domain addition and verification.
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Global Administrator Best Practices
Key term
Custom domain
A custom domain is a personalized internet address (like contoso.com) that you can use with cloud services instead of the default domain provided by the service provider.
Key term
Microsoft 365 tenant
A Microsoft 365 tenant is a dedicated, isolated instance of Microsoft 365 services created for an organization when they sign up for a subscription.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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