Lighthouse Co. is a graphics arts design consulting firm. Robin Dover, its treasurer and vice president of finance, has prepared a classified balance sheet as of July 31, 2006, the end of its fiscal year. This balance sheet will be submitted with Lighthouse's loan application to Central Trust & Savings Bank.
In the Current Assets section of the balance sheet, Robin reported an $80,000 receivable from Ron Knoll, the president of Lighthouse, as a trade account receivable.
Ron borrowed the money from Lighthouse in February 2005 for a down payment on a new home. He has orally assured Robin that he will pay off the account receivable within the next year. Robin reported the $80,000 in the same manner on the preceding year's balance sheet.
Evaluate whether it is acceptable for Robin Dover to prepare the July 31, 2006 balance sheet in the manner indicated above.