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

[mtwtfss]

Conservatism maybe

[Flaming_Arrow]

Conservatism maybe

ye it is, your assuming that cash receipts(receipts from debtors) are certain when in fact its not, there could be bad debts which actually decrease the amount to be received. you should only record a gain when its certain. you could also say its reporting period if you justify it correctly

[rhjc.1991]

Conservatism

Reporting period would also be correct but I think the crux of the question is more about the conservatism principle side. That said, you can get full marks either one but it would be easier for a full mark if you go with the conservatism principle since reporting period principle is more about calculating an accurate PROFIT for the period. (and the error would not effect the profit figure)