Final answer:
Revenue recognition criteria according to GAAP requires revenue to be earned and collection assured before it can be recognized on the income statement.
Step-by-step explanation:
The statement is true. According to GAAP (Generally Accepted Accounting Principles), revenue recognition criteria states that revenue should be recognized on the income statement when it is earned and collection must be assured. This means that revenue should be recorded when the seller has performed the services or delivered the goods to the customer, and there is a high probability of collecting payment from the customer.