SC-900 Describe the capabilities of Microsoft Entra Practice Question
Your company uses Microsoft Entra ID and wants to automatically assign licenses to new employees based on their department. Which feature should you use?
⚠ Common exam trap
Candidates often confuse Entitlement management (which manages access packages) with automatic license assignment, but Entitlement management does not natively assign licenses based on department attributes—it requires custom integration, whereas Dynamic groups with group-based licensing is the direct, built-in solution.
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
✓
Dynamic groups and group-based licensing
Dynamic groups in Microsoft Entra ID allow you to automatically add or remove users based on attributes like department. Combined with group-based licensing, you can assign licenses (e.g., Microsoft 365 E5) to all members of that group, so when a new employee is added with the matching department attribute, they automatically receive the correct license without manual intervention.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Privileged Identity Management
Why it's wrong here
Privileged Identity Management (PIM) in Microsoft Entra ID is designed to manage, control, and monitor access to critical resources by providing just-in-time and just-enough access for privileged roles. Its primary function is to mitigate the risks associated with excessive or unnecessary administrative permissions by enforcing time-bound access and approval workflows for roles like Global Administrator or User Administrator. PIM does not directly assign product licenses to users based on their attributes; instead, it focuses on securing and auditing elevated role assignments.
- ✗
Access reviews
Why it's wrong here
Access reviews are a governance feature within Microsoft Entra ID that enables organizations to periodically review who has access to various resources, such as groups, applications, or privileged roles. Their purpose is to ensure that only authorized individuals maintain access, helping to enforce the principle of least privilege and meet compliance requirements by identifying and removing stale or inappropriate access. Access reviews are an auditing and remediation tool for existing access, not a mechanism for automatically provisioning new licenses or assigning users to groups based on their attributes.
- ✓
Dynamic groups and group-based licensing
Why this is correct
This combination provides a robust solution for automatic license assignment based on user attributes. Dynamic groups in Microsoft Entra ID automatically update their membership based on predefined rules that query user attributes (e.g., department, job title, location). When group-based licensing is then applied to such a dynamic group, all current and future members automatically receive the assigned licenses, and licenses are automatically revoked if a user's attributes change, causing them to no longer meet the group's membership criteria.
- ✗
Entitlement management
Why it's wrong here
Entitlement management, a component of Microsoft Entra ID Governance, allows organizations to manage identity and access lifecycle at scale by bundling resources into 'access packages.' Users typically request access to these packages, which can include groups, applications, and SharePoint sites, and their requests go through defined approval workflows. While it automates the provisioning of access to resources upon approval, it is primarily a request-driven system for managing access packages, not a direct mechanism for automatically assigning product licenses based solely on user attributes without user initiation.
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Microsoft Entra ID
Key term
Microsoft 365
Microsoft 365 is a subscription-based cloud service from Microsoft that combines productivity tools like Office apps with security, device management, and online storage.
Key term
Microsoft Entra ID
Microsoft Entra ID is a cloud-based identity and access management service that lets employees sign in and access resources both inside and outside of your organization.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.