Balance Sheet

Assets are economic resources that

provide or are expected to provide
benefit to the organization.
Current assets are economic resources
that have a life of less than one year
(i.e., the organization expect to
consume them within one year).
Cash equivalents is money placed in
instruments with high liquidity and
safety.
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Short-term investment is money placed
in securities with maturities up to one
year.

Patient accounts receivable, or the net

of allowance for doubtful accounts, is
money due to the organizations from
patients for services already provided,
minus an estimate of how much money
the organization will not collect.

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Other current assets is money and other
economic resources that the organizations
expects to consume and expense within one
year, such as inventories and prepaid
expenses.

Long-term assets are economic resources

that have a life of more than one year.

Long-term investment is money placed in

securities with maturities of more than one
year such as stocks and bonds.

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Property and equipment, net is
economic resources such as land,
buildings, and equipment, minus the
amount that has been depreciated over
the life of the buildings and equipment,
which is accumulated depreciation.
Liabilities are economic obligations, or
debts, of the organization.

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Current liabilities are economic
obligations, or debts, that are due
in less than one year.
Current portion of long-term debt is
money due within one year on a
long-term debt.
Accounts payable and accrued
expenses is money due within one
year to vendors and employees
(sometimes called accrued
wages).

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Other current liabilities are other economic
obligations that are due in less than one year.
These may include deferred revenue, which is
revenue received but not yet earned .
Long-term liabilities are economic obligations, or
debts, that are due in more than one year.
Long-term debt, net of current portion is an
economic obligation, or debt, that is due in more
than one year, minus the amount that is due
within one year referenced above.

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Net Assets is the current American Institute
of Certified Public Accountants (AICPA)-
approved terminology for the difference
between assets and liabilities in not-for-
profit healthcare organizations.

Shareholders’ equity is the current AICPA-

approved terminology for the difference
between assets and liabilities in for-profit
healthcare organizations and represents
the ownership interest of stockholders in
the organization. Shareholders’ equity is
also called stockholders’ equity, owners’
equity, and net worth and is comprised of
common stock and retained earnings.
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Common stock is money invested in the
organization by its owners.
Retained earnings is income earned by
the organization form operations minus
dividends (which are distributions of
earnings paid to stockholders based on
the number of shares of stock owned).