Problem
Sandie starts in business as a sole trader on 1 July 2021. She works as a dog groomer and nutritionist and offers a subscription-based dog club with several benefits for members. Her financial year ends on 30 June. Her first set of accounts will cover the year to 30 June 2022. Sandie immediately enters into an 18-month lease for premises to be used as an office, grooming facility and store room. She pays the whole amount of £36,000 on 1 July 2021. On 30 September 2021, in response to a successful advertising campaign, Sandie sells 40 annual club memberships worth a total of £2,000.
Describe two inappropriate financial consequences that may result from using cash accounting for her membership sales.