MS-102 Deploy and manage a Microsoft 365 tenant Practice Question
Your organization needs to create a custom domain in Microsoft 365. You have added the domain 'contoso.com' to the tenant. What is the next step to verify domain ownership?
⚠ Common exam trap
Candidates often confuse domain verification (TXT record) with domain configuration (MX record), mistakenly thinking that setting up email routing is the immediate next step after adding the domain.
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 a TXT record to the public DNS zone.
After adding a custom domain to a Microsoft 365 tenant, the next mandatory step is to prove ownership of the domain by adding a specific TXT record provided by Microsoft to the domain's public DNS zone. Microsoft queries this TXT record to verify that you control the domain before allowing you to use it for services like email or user accounts. This verification step is required by Microsoft's domain onboarding process and must succeed before any other configuration can proceed.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Create user accounts with the custom domain.
Why it's wrong here
Creating user accounts with a custom domain is a post-verification action, not a verification method. In Microsoft 365, you cannot set the custom domain as a user principal name (UPN) until the domain has been verified and added as an accepted domain. Therefore, this option does not prove DNS ownership and fails as a prerequisite step.
- ✗
Configure the email exchange (MX) record.
Why it's wrong here
Configuring an MX record is incorrect because MX records are used for mail routing, specifying the mail server that receives email for the domain. Domain verification requires a TXT record with the unique verification token issued by Microsoft; the MX record contains no such token and would not satisfy the ownership check. Adding MX before verification could also disrupt mail flow if the domain is not yet properly configured in the tenant.
- ✗
Assign licenses to users with the custom domain.
Why it's wrong here
Assigning licenses to users in a custom domain is a downstream step that depends on both user creation and domain verification. License assignment in the admin center is possible only for existing user objects, and those users can have the custom domain in their UPN only after the domain is verified. Additionally, license assignment carries no DNS information and therefore provides no proof that you control the domain.
- ✓
Add a TXT record to the public DNS zone.
Why this is correct
The correct approach is to add a TXT record to the public DNS zone. Microsoft provides a unique TXT value in the domain verification wizard, and placing it in your DNS zone demonstrates that you control the domain's DNS namespace. Once the TXT record propagates and Microsoft queries it successfully, the domain is marked verified, allowing subsequent configuration steps like setting up MX records and creating users.
Visual reference
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Related to this question
Learn chapter
Azure Active Directory Domain Services (AADDS)
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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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This MS-102 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 MS-102 exam.