You have a Microsoft 365 subscription and Azure AD on the Premium P1 tier. You are planning license allocation and want to create a group that will automatically add all users from the Sales-department. What kind of group in Azure Active Directory should you create? 

Answer options:

A.Group type: Security, Membership type: Assigned
B.Group type: Security, Membership type: Dynamic Device
C.Group type: Security, Membership type: Dynamic User
D.Group type: Microsoft 365, Membership type: Assigned

Correct Answer: C 
You should create a security group with the dynamic user membership type, and add the dynamics query: 

Option A is incorrect. Assigned membership type will not automatically assign your licenses based on a query.
Option B is incorrect. We are using the attribute “department” which is associated with the Azure AD user, not device.
Option D is incorrect. For assigning licenses we should use a Security group, not Microsoft 365. Also the membership type is Assigned, which will not let us create a query to assign licenses based on department information.
Reference: 
To know more about Azure AD dynamics groups, please refer to the link below: 

https://docs.microsoft.com/en-us/azure/active-directory/enterprise-users/groups-dynamic-membership