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SC-300 · Question #8

You need to configure the assignment of Azure AD licenses to the Litware users. The solution must meet the licensing requirements. What should you do? To answer, select the appropriate options in…

The correct answer is Azure AD Connect settings to modify:: Directory Extensions; Assign Azure AD licenses to:: An Azure Active Directory group that has the Dynamic User membership type. Hotspot Explanation: Azure AD License Assignment via Custom Attribute Background The core requirement: Litware added a custom on-premises AD attribute (LWLicenses) and wants users to be automatically added to a Microsoft 365 licensing group based on that attribute's value…

Submitted by khalil_dz· Mar 6, 2026Implement and manage user identities
Case Study ScenarioShared context for this question
Case Study 2 - Litware, Inc Overview Litware, Inc. is a pharmaceutical company that has a subsidiary named Fabrikam, Inc. Litware has offices in Boston and Seattle, but has employees located across the United States. Employees connect remotely to either office by using a VPN connection. Existing Environment. Identify Environment The network contains an Active Directory forest named litware.com that is linked to an Azure Active Directory (Azure AD) tenant named litware.com. Azure AD Connect uses pass-through authentication and has password hash synchronization disabled. Litware.com contains a user named User1 who oversees all application development. Litware implements Azure AD Application Proxy. Fabrikam has an Azure AD tenant named fabrikam.com. The users at Fabrikam access the resources in litware.com by using guest accounts in the litware.com tenant. Existing Environment. Cloud Environment All the users at Litware have Microsoft 365 Enterprise E5 licenses. All the built-in anomaly detection policies in Microsoft Cloud App Security are enabled. Litware has an Azure subscription associated to the litware.com Azure AD tenant. The subscription contains an Azure Sentinel instance that uses the Azure Active Directory connector and the Office 365 connector. Azure Sentinel currently collects the Azure AD sign-ins logs and audit logs. Existing Environment. On-premises Environment The on-premises network contains the servers shown in the following table. Both Litware offices connect directly to the internet. Both offices connect to virtual networks in the Azure subscription by using a site-to-site VPN connection. All on-premises domain controllers are prevented from accessing the internet. Requirements. Delegation Requirements Litware identifies the following delegation requirements: Delegate the management of privileged roles by using Azure AD Privileged Identity Management (PIM). Prevent nonprivileged users from registering applications in the litware.com Azure AD tenant. Use custom catalogs and custom programs for Identity Governance. Ensure that User1 can create enterprise applications in Azure AD. Use the principle of least privilege. Requirements. Licensing Requirements Litware recently added a custom user attribute named LWLicenses to the litware.com Active Directory forest. Litware wants to manage the assignment of Azure AD licenses by modifying the value of the LWLicenses attribute. Users who have the appropriate value for LWLicenses must be added automatically to a Microsoft 365 group that has the appropriate licenses assigned. Requirements. Management Requirements Litware wants to create a group named LWGroup1 that will contain all the Azure AD user accounts for Litware but exclude all the Azure AD guest accounts. Requirements. Authentication Requirements Litware identifies the following authentication requirements: Implement multi-factor authentication (MFA) for all Litware users. Exempt users from using MFA to authenticate to Azure AD from the Boston office of Litware. Implement a banned password list for the litware.com forest. Enforce MFA when accessing on-premises applications. Automatically detect and remediate externally leaked credentials. Requirements. Access Requirements Litware identifies the following access requirements: Control all access to all Azure resources and Azure AD applications by using conditional access policies. Implement a conditional access policy that has session controls for Microsoft SharePoint Online. Control privileged access to applications by using access reviews in Azure AD. Requirements. Monitoring Requirements Litware wants to use the Fusion rule in Azure Sentinel to detect multi-staged attacks that include a combination of suspicious Azure AD sign-ins followed by anomalous Microsoft Office 365 activity.

Question

You need to configure the assignment of Azure AD licenses to the Litware users. The solution must meet the licensing requirements. What should you do? To answer, select the appropriate options in the answer area. NOTE: Each correct selection is worth one point. Answer:

Answer Area

  • Azure AD Connect settings to modify:Directory Extensions
    Directory ExtensionsDomain FilteringOptional Features
  • Assign Azure AD licenses to:An Azure Active Directory group that has the Dynamic User membership type
    An Azure Active Directory group that has only nested groupsAn Azure Active Directory group that has the Assigned membership typeAn Azure Active Directory group that has the Dynamic User membership type

Explanation

Hotspot Explanation: Azure AD License Assignment via Custom Attribute

Background

The core requirement: Litware added a custom on-premises AD attribute (LWLicenses) and wants users to be automatically added to a Microsoft 365 licensing group based on that attribute's value.


Dropdown 1 - Azure AD Connect settings to modify

Correct: Directory Extensions

Why Directory Extensions is correct

LWLicenses is a custom attribute - it does not exist in the default Azure AD schema. By default, Azure AD Connect only syncs a predefined set of attributes. Directory Extensions lets you extend the Azure AD schema by syncing additional custom on-premises attributes to Azure AD, making LWLicenses available as an attribute on the cloud user object (e.g., extension_<appId>_LWLicenses). Without this, the attribute simply never reaches Azure AD.

Why the alternatives are wrong

OptionWhy it's wrong
Domain FilteringControls which domains are synchronized, not which attributes. Has no effect on attribute-level data.
Optional FeaturesEnables features like Password Hash Sync, Group Writeback, or Device Writeback - none of which address syncing a custom attribute.

Dropdown 2 - Assign Azure AD licenses to

Correct: An Azure Active Directory group that has the Dynamic User membership type

Why Dynamic User membership is correct

The requirement says users must be added automatically based on the LWLicenses attribute value. Dynamic User groups evaluate a membership rule continuously and add/remove members automatically when attribute values change. You'd write a rule like:

user.extension_<appId>_LWLicenses -eq "E5"

When the on-premises attribute is updated and synced via AAD Connect + Directory Extensions, the user is automatically placed into the group - which carries the license assignment.

Why the alternatives are wrong

OptionWhy it's wrong
Assigned membership typeRequires manual addition of members. This violates the "automatically" requirement - an admin would need to update group membership every time an attribute changes.
Only nested groupsAzure AD group-based licensing does not support nested groups. License assignments only apply to direct members of the licensed group - nested group members are explicitly excluded from inheriting licenses.

Key Technical Concepts

  • Directory Extensions (AAD Connect): Extends Azure AD schema with custom on-premises attributes via the Microsoft.InfrastructureDirectory app registration.
  • Dynamic User Groups: Membership rules are re-evaluated every 24 hours (or near-real-time on attribute change). They require Azure AD P1 licensing minimum.
  • Group-Based Licensing: Licenses are assigned to a group; direct members inherit the license. Nested groups and the "Only nested groups" scenario are unsupported.

Topics

#Azure AD Connect#Directory Extensions#Group-based Licensing#Dynamic Groups

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