EM12c - Microsoft SQL Server (MSSQL) target - Test connection fails - Target remains in Pending stat

Hi All,
We have noticed a real increase in questions from your side around the adding of a Microsoft SQL Server target to EM12c.
In this Post I would like to highlight what is exactly happening and what is the best way to resolve it.

Adding the MSSQL Target

The following support note has great importance as it matters what data you enter for the discovery in how the Agent will access the MSSQL instance.
For Example, when one uses Windows Integrated Authentication and the Agent is on the same host as the MSSQL instance, so System or Database credentials should be provided. When you do provide them the Agent will assume you're using SQL integrated authentication or that the Database is remote from it's own host.