It is acceptable under generally accepted accounting principles for the client to include material related party receivables together with trade receivables on the balance sheet.

Question

Quizplus · Accepted Answer

Generally accepted accounting principles require material related party receivables to be disclosed separately from trade receivables in the balance sheet to provide transparency for users of the financial statements. Combining the two could potentially obscure the true financial position of the company.

It Is Acceptable Under Generally Accepted Accounting Principles for the Client