When you drop a bouncy ball from a height, it possesses potential energy due to its position. As it falls, this potential energy is converted into kinetic energy. However, when the ball hits the ground, some of this kinetic energy is converted into other forms of energy. Friction between the ball and the ground causes heat to be generated, resulting in a loss of energy. Additionally, the impact of the ball with the ground creates vibrations in the air, which we perceive as sound. Therefore, both heat and sound are created when the ball bounces, leading to a loss of energy.