Bonds That Have Been Downgraded Can Fall into a Group

question 4

Multiple Choice

Bonds that have been downgraded can fall into a group described as ________.

• A) issues that have been downgraded because the issuer voluntarily and significantly decreased their debt as a result of a leveraged buyout or a recapitalization.
• B) issues that have been upgraded because the issuer voluntarily and significantly increased their debt as a result of a leveraged buyout or a recapitalization.
• C) issues that have been downgraded because the issuer voluntarily and significantly increased their debt as a result of a leveraged buyout or a recapitalization.
• D) None of these

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Definitions:

Owner's Drawings Account

An equity account that tracks the amounts withdrawn by the owner(s) of a business from the company for personal use.

Right Side

In accounting, this refers to the credit side of a ledger account, opposite of the left side (debit side), reflecting increases in liabilities, equity, and revenue accounts.

Account

A record used to keep track of financial transactions within a specific category in accounting.

Credit Side

The right side of an accounting ledger where increases in liabilities, equity, and revenue accounts, or decreases in assets and expense accounts are recorded.