TAX

RECEIVABLES AND PAYABLES

DEBT DEFINITION

Debt is generally defined as an obligation that results from the

credit-based acquisition of products or services for use in a

company's operations and that must be settled promptly or within

a limited time frame. In contrast, the definition of debt in

accounting is a financial sacrifice made for the future in exchange

for the delivery of goods and services under the terms of a

previous deal or transaction between the parties.

COMPARISON OF PAYABLES AND RECEIVABLES

 The owner of the debt is referred to as the debtor, whilst the owner of the receivables is

known as the creditor.

 Receivables are considered current assets in bookkeeping or accounting, whereas debts

are considered expenses, specifically pasiva, whose existence lowers assets.

 When receiving receivables, interest on receivables is typically an additional receipt,

whereas when paying debts, interest expenditure is typically an additional expense.

 DEBT TYPES
 Contingent Debt

An arrangement that creates obligations between borrowers is known as long-term debt. If both the

borrower and the creditor agree that the creditor will lend a specific amount and the borrower will

make periodic payments on the loan (futures, credit or installments).

 Long-term debt

Debt that has a longer timeframe than short-term debt but less time than long-term debt is defined

as medium-term debt.

 Debt of the moment

A financial commitment of a business that must be settled quickly—typically within one year of

the balance sheet date—is referred to as short-term debt.

 Here are some instances of short-term debt :
1. Debt resulting from the acquisition of products or services from third parties, also known as accounts payable or service
debt. These products and services may be for resale or for the efficient operation of the business's operations, such as the
purchase of office supplies, cleaning services, or maintenance services for equipment.
2. Dividends: When a company owns shares in IDX and is a kind of company, dividends will be paid. Every accounting
period, dividends are paid out and are recorded in the financial accounts.
3. Debt costs are monthly expenses that the business incurs and that are often owed each month. Examples include the cost
of credit, power, water, telephone, and internet.
4. Income obtained up front: This debt develops when the customer pays the business a particular sum of money but does
not receive any goods or services in return. Although this kind of short-term debt is not in the form of cash, it
nevertheless falls within the debt category because the corporation still has outstanding obligations.
5. Debt owed in the form of money orders to specific persons, supported only by written agreements and free of any other
security.
 Characteristics of debt:

The following are traits of short-term debt:

Following are the traits of long-term debt:
1. The maturity is less than one year or one financial cycle.
1. The maturity date is generally within 1 accounting period, 1
2. Direct payment, the stated debt amount, and no term
year, or even longer.
payments or installments.
2. Assets or collateral can take the shape of documents like
3. It is devoid of flowers.
certificates, BPKBs (Proof of Motor Vehicle Owner), or other
4. It merely relies on written agreement or faith and doesn't
securities.
call for any promises.
3. In line with the terms of the parties' agreement, payment is
provided in the form of futures or installments with interest.
4. Acquired from companies or financial organizations that
offer long-term financing.
Taxpayers who died without leaving an inheritance or having no heirs,

1. as shown by a death certificate and a certificate stating that the deceased taxpayer

did not leave an inheritance and did not have heirs from the authorized official, are

among those who cannot or are unlikely to have their tax debts collected again.

2. Taxpayers who no longer have any assets, as proven by a declaration from a

qualified official stating that the taxpayer actually has no assets.

 DEBT REDUCTION ADVICE

debt reduction advice

1. Make a thorough plan.Firm owners should establish thorough preparations regarding the amount of cash required
to run the business and the numerous dangers that may later occur before beginning to owing obligations to the
party in question. Next, consider your capacity to settle current debts.
2. assessing the need for debtEntrepreneurs must decide whether long-term or short-term debt is included in the
essential obligations. Choosing the wrong form of debt is not something you want to do.
 CONCLUSION

Tax receivables are debts that develop when tax revenue that has been subject to the Tax Law's
regulations is not paid until the end of the reporting month.You must be aware that each taxpayer is
required to pay back this tax debt during the current quarter of the next year. Therefore, until the
following period, there won't be any receivables built up. These accounts payable typically fall under the
heading of short-term accounts payable.
If commercial debt or trade debt is understood to be carried out on credit, the life of the debt can be
classified as a set of settlement obligations. There are three types of debt: good debt, non-current debt,
and current debt.A company's obligation that can be paid off before maturity is known as current debt.
Obligations owed by a business that are not currently due are called non-current debt. There is,
however, a short-term delay of under 30 days. An obligation that cannot be met for more than 30 days is
referred to be a bad debt.