SC-900 Practice Question: Describe the concepts of security, compliance, and identity
Which TWO of the following are benefits of using Microsoft Entra ID for identity management?
⚠ Common exam trap
SC-900 often tests whether candidates confuse Entra ID features (like password hash sync) with benefits, or mistakenly believe Entra ID replaces on-premises Active Directory.
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
✓
Single sign-on (SSO) to cloud applications
Option A is correct because Microsoft Entra ID provides single sign-on (SSO), allowing users to authenticate once and access many cloud applications (e.g., Microsoft 365, Salesforce) via protocols like SAML 2.0, WS-Federation, or OpenID Connect, which is a core identity-management benefit. Option C is correct because Entra ID natively supports multi-factor authentication (MFA), adding a second verification factor (such as the Microsoft Authenticator app, SMS, or FIDO2 key) to strengthen sign-in security, which is a primary benefit of the service. Option B is not a benefit of Entra ID itself but rather a specific hybrid identity synchronization method (via Microsoft Entra Connect) used to sync on-premises password hashes to the cloud. Option D is incorrect because automated security incident detection is a capability of Microsoft Defender/Sentinel, not a core identity-management benefit of Entra ID. Option E is incorrect because Entra ID is a cloud identity provider and does not replace on-premises Active Directory Domain Services; the two are typically used together in hybrid scenarios.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Single sign-on (SSO) to cloud applications
Why this is correct
Single sign-on (SSO) to cloud applications is a core benefit of Microsoft Entra ID, enabling users to authenticate once with their Entra ID credentials and gain seamless access to thousands of integrated Software-as-a-Service (SaaS) applications. This capability significantly enhances user productivity by eliminating the need to remember multiple passwords and repeatedly log in, while also improving security by centralizing identity management. Entra ID acts as the central identity provider, issuing secure tokens after initial authentication.
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Password hash synchronization
Why it's wrong here
Password hash synchronization (PHS) is a specific method utilized by Microsoft Entra Connect to synchronize user identities and their password hashes from an on-premises Active Directory to Microsoft Entra ID. While PHS is a crucial component for enabling hybrid identity scenarios and allowing users to authenticate to cloud services with their existing on-premises credentials, it is a *feature* or *method* of synchronization, not a direct end-user or administrative *benefit* of Entra ID itself. The benefit comes from the resulting unified identity experience, which PHS helps facilitate.
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Multi-factor authentication (MFA)
Why this is correct
Multi-factor authentication (MFA) is a fundamental security benefit provided by Microsoft Entra ID, allowing organizations to require users to verify their identity using two or more verification methods. Entra ID offers robust, built-in MFA capabilities, supporting various methods such as the Microsoft Authenticator app, FIDO2 security keys, and biometrics. Implementing MFA significantly strengthens security by making it much harder for unauthorized users to gain access, even if they manage to compromise a user's password.
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Automated security incident detection
Why it's wrong here
Automated security incident detection is not a primary or core benefit of Microsoft Entra ID itself, which primarily focuses on identity and access management. While Entra ID generates extensive audit logs and sign-in reports that can be used for security analysis, the advanced, automated detection and response to security incidents across an entire environment are typically handled by broader security services. These capabilities are provided by solutions like Microsoft Sentinel for Security Information and Event Management (SIEM) or Microsoft 365 Defender for Extended Detection and Response (XDR), which consume Entra ID data but operate at a higher level of security operations.
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Replacement of on-premises Active Directory
Why it's wrong here
Microsoft Entra ID is not a replacement for on-premises Active Directory Domain Services (AD DS); rather, it is a complementary cloud-based identity and access management solution designed for cloud applications and services. Many organizations operate in a hybrid identity model where Entra ID coexists with on-premises AD DS, with identities synchronized between the two using Microsoft Entra Connect. This allows users to access both on-premises resources managed by AD DS and cloud resources managed by Entra ID using a single set of credentials, leveraging the strengths of both systems.
Go deeper
Related to this question
Learn chapter
Threat and Vulnerability Management
Key term
SAML
Security Assertion Markup Language (SAML) is an open standard that allows one system to securely tell another system that a user is who they say they are, without sharing the user's password.
Key term
SSO
Single Sign-On (SSO) is an authentication process that allows a user to access multiple applications or systems with one set of login credentials.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
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