Accidental Recording of Credit Sale in a Cash Flow Statement

[wildareal]

Using an Accounting principle, explain why the accidental recording of a credit sale by Dimitri in the cash flow statement would be incorrect? I'm guessing reporting period but how? Thanks

[phanphy]

The Reporting Period principle states that the life of the business is to be divided into periods of time to allow reports to be prepared. Reports should reflect the reporting period in which a transaction occurs. Thus, as credit sales does not involve an inflow of cash until a later date, this inflow of cash is not reported in the CFS until the money is received from debtors (in a subsequent RP).