From Open Risk Manual


Debt. An obligation to pay something, such as an amount of money, good, service, or instrument.

Debt is a duty or obligation to pay Money, deliver products, or render services. The use of debt to finance an organization's activity implies the repayment of principal and interests. Because the interest paid on debt can be written off as an expense, debt is normally the cheapest type of long-term financing.

In cases where the debtor and payer are the same legal person, then a debt is equivalent to a payment obligation.

See Also

  • Barron's Dictionary of Business and Economics Terms, Fifth Edition, 2012


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