In the Event of Default,_____ Debt Holders Must Give Preference

question 26

Multiple Choice

In the event of default,_____ debt holders must give preference to more _____ debt holders in the priority of repayment distributions.

• A)subordinated; senior
• B)long-term; short-term
• C)senior; junior
• D)senior; subordinated
• E)short-term; long-term

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Definitions:

Footing

Footing is the process of summing up the numerical values in an accounting column to determine the total, typically as a preliminary step in the preparation of financial statements.

Normal Debit Balance

The expected balance type of an account that is increased by a debit, typical for assets, expenses, and losses.

Withdrawals

Money taken out from a bank account, or the act of taking out funds from a business by its owners for personal use.

Expenses

Outflows or other uses of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major operations.