Cash received from unclear transactions, like distributions from a limited partnership are:

When cash is received from unclear transactions, such as distributions from a limited partnership, it is typically appropriate to post that cash to principal. This is done to ensure that the principal is accurately reflected in the financial records, as the nature of the distribution may not be entirely clear and could potentially include a return of capital rather than income.

By initially posting to principal, the organization can maintain a conservative approach, protecting against the misrepresentation of income. In scenarios where the specifics of the distribution become clearer, and it is determined that a portion qualifies as income, a reallocation can then be made. This process allows for adjustments to be performed later without compromising the integrity of the initial financial reporting.

This method of handling such distributions is especially important in managing the financial health and accuracy of a portfolio, as both principal and income need to be correctly accounted for to avoid misstatements.