nlapiTransformRecord throws INVALID_INITIALIZE_REF error

nlapiTransformRecord throws INVALID_INITIALIZE_REF when transforming Sales Order Record to Invoice

Sample Script:
var invoice = nlapiTransformRecord('salesorder', 1370, 'invoice');    // where 1370 is Internal ID of Sales Order
nlapiSubmitRecord(invoice );

To fix this navigate to:
(1) Setup > Accounting > Preferences > Set Up Accounting > Order Management tab > Invoicing
(2) Enable the Invoice in Advance of Fulfillment preference


(3) Save the Preference

After saving the preference, the above sample script should be able to transform Sales Order.