This SC-900 practice question tests your understanding of describe the capabilities of microsoft entra. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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.
Which TWO of the following are types of identities that can be managed in Microsoft Entra ID? (Select two.)
Group objects
Why wrong: Groups are not identities; they contain identities.
User identities
Users are the primary identity type.
Service principal identities (application identities)
Service principals represent applications in the directory.
Policy objects
Why wrong: Policies are configurations, not identities.
Device objects
Why wrong: Device objects are managed by Microsoft Intune and registered in Entra ID, but are not an identity type.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
User identities
Option B is correct because user identities represent individual users who need access to resources, and they are the most fundamental identity type in Microsoft Entra ID. Option C is correct because service principal identities (application identities) are used to represent applications and automated tools, enabling them to authenticate and access resources securely.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Group objects
Why it's wrong here
Groups are not identities; they contain identities.
User identities
Why this is correct
Users are the primary identity type.
Related concept
Read the scenario before looking for a memorised answer.
Service principal identities (application identities)
Why this is correct
Service principals represent applications in the directory.
Related concept
Read the scenario before looking for a memorised answer.
Policy objects
Why it's wrong here
Policies are configurations, not identities.
Device objects
Why it's wrong here
Device objects are managed by Microsoft Intune and registered in Entra ID, but are not an identity type.
Common exam traps
The trap here is that candidates often confuse directory objects (like groups, devices, and policies) with identity principals, mistakenly thinking that any object stored in Entra ID is a type of identity that can be directly authenticated.
Detailed technical explanation
In Microsoft Entra ID, identities are principals that can be authenticated and authorized, with user identities using OAuth 2.0 and OpenID Connect protocols, while service principal identities use client credentials or certificate-based authentication for app-to-app scenarios. A subtle behavior is that a service principal is the local representation of an application object in a specific tenant, and it can be assigned roles and permissions just like a user identity. In real-world scenarios, service principals are critical for automating tasks via Microsoft Graph API, where they authenticate without user interaction.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.
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FAQ
Describe the capabilities of Microsoft Entra — This question tests Describe the capabilities of Microsoft Entra — Read the scenario before looking for a memorised answer..
The correct answer is: User identities — Option B is correct because user identities represent individual users who need access to resources, and they are the most fundamental identity type in Microsoft Entra ID. Option C is correct because service principal identities (application identities) are used to represent applications and automated tools, enabling them to authenticate and access resources securely.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 24, 2026
This SC-900 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 SC-900 exam.
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