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Related to Debts: Bad debts, national debts
the total of obligations due an enterprise, organization, or establishment from legal “persons” [such as corporations] or individuals as a result of economic relations. The source of payment of debts is the debtor’s own funds diverted from working capital.
Under the conditions governing the socialist economy, debts are subdivided according to their origin into indebtedness arising from the normal process of economic activity and indebtedness arising from budgeting and paying violations, as well as from violations of socialist legality. To the first category belong such items as advances to suppliers under contracts (for gas, electric power, motor-transport and communication services, and purchase of certain materials); planned and preliminary payments for which the goods were to be delivered later; the liability of officials responsible for returns (in connection with advances issued to them) for failure to act within the time permit they have; and the liability of tenants of housing units for nonpayment of rent for the last month. The second category of debts covers debts connected with deficits, embezzlement, and misappropriation; claims acknowledged by defendants or adjudged by arbitration and arising from inadequacies in the quantities or qualities of goods (or services) with regard to the selected previously fixed assortment; and other forms of overdue debts.
From the point of view of economic content, debts also include liabilities of buyers for goods delivered and work completed and not paid for on time, as well as for goods on which the documents were not submitted to the bank for collection as collateral for loans; liabilities of production and clerical workers for loans received for individual housing construction and purchase of goods on credit in excess of the bank loans issued for these purposes, and so on. Debts for which the period of limitation has expired are, with the permission of the manager of the enterprise or organization, written off as a loss with a notification sent to a higher agency. Persons guilty of allowing time to run out in cases involving limitations of actions are held responsible.
I. N. GASKAROVA
the total money of an enterprise, organization, or institution that is owed to legal or physical entities.
In the process of the economic activities of socialist enterprises, debt occurs naturally for incomplete payments; this is a normal indebtedness to creditors. Such indebtedness includes debts to suppliers within the established due dates of bills, debts to production and office employees for wages and to trade union organizations for social security deductions, debt incurred through the significantly early receipt of materials or capital stocks in comparison with the term of their payment, debts to financial bodies for the turnover tax and profit payments within the current payment dates, debts caused by excesses of actual total monetary accumulation in comparison with the established plan, and debts to suppliers under offsetting of payments. Debts may also arise through the violation of financial discipline and the established payment procedure. This category includes indebtedness to suppliers for bills not paid on time and for deliveries not invoiced and debts to suppliers formed when the received materials or capital stocks exceed the total paid bills. Debts for which the period of limitation has expired go to the state budget as income.
I. N. GASKAROVA