Profit of Socialist Enterprises, form of net income of socialist society. Another form of socialist society’s net income is turnover tax. It is produced by surplus labour and partially by necessary labour. In quantitative terms, it is the difference between the wholesale price (minus turnover tax) of the products sold and their prime cost. In economic content it is radically different from profit in capitalist production: it is the result of the producers’ labour freed from exploitation and is employed in the interest of society as a whole. It plays a major role in cost-accounting relations, for it characterises the effect of the enterprise’s cost-accounting activity in cash form, and stimulates the fulfilment of the production and sales plan with the lowest expenditure of labour and material resources. It also fulfils the function of distributing surplus product. The profit’s movement reflects many aspects of the economic activity of a socialist enterprise, such as the degree to which production assets are used, the technological level, organisation of production and labour, etc. The amount of profit expresses the results of lowest prime costs, the increased volume of products sold, and their higher quality. The total profit is included in the plan indices approved centrally for the production association (enterprise) concerned. A new pattern of distributing profits has been introduced in the Soviet Union to make the production associations (enterprises), and all-Union (Republican) industrial associations and ministries more responsible for the results of their financial and economic activities and increase their interest in the most effective utilisation of material and financial resources. According to this pattern, approved five-year plan assignments serve as the basis for determining, for each year, normative deductions from profit to be placed at the disposal of the ministry or association (enterprise). This part of profit goes to finance capital investments, to repay bank credits and the interest on them, to ensure an increase in the circulating assets, to form the united science and technology development fund, to compensate other plan expenditures and to build the economic incentives fund. In accordance with these normatives, five-year plan assignments establish the absolute amount (in roubles) of profit deductions to the USSR state budget, calculated by the year. When the approved profit plan has not been fulfilled in a certain year, budgetary payments earmarked in the five-year plan for that particular year are made in full at the expense of the corresponding decrease in the profit remaining at the disposal of the ministry or association (enterprise) concerned. The excess over the planned profit is distributed along the same channels, albeit in somewhat different sequence and ratio. As social production expands, the quantity of products grows, and the enterprises’ economic activity improves, the profit remaining at the disposal of associations (enterprises) constantly increases, and so does the mass of profit added to the state budget. This creates favourable conditions for the growth of social production and for providing greater material stimuli for work collectives and individual workers for better results of their work.