All of the following are examples of restrictive debt covenants EXCEPT
A) prohibition on selling accounts receivable.
B) supplying the creditor with audited financial statements.
C) constraint on subsequent borrowing.
D) prohibition on entering certain types of lease arrangements.

Question

Quizplus · Accepted Answer

Supplying audited financial statements is not a restrictive debt covenant as it is a standard requirement for most loans. The other options listed are all examples of restrictive covenants, which limit the borrower's actions and impose conditions on the use of borrowed funds.

All of the Following Are Examples of Restrictive Debt Covenants