Final answer:
The statement is true as the installment-sales method does involve companies deferring revenue and income recognition until cash is collected, thus matching revenue with actual cash flows.
Step-by-step explanation:
Under the installment-sales method, companies indeed defer revenue and income recognition until the period of cash collection. Therefore, the statement is True.
The installment-sales method is often used when the revenue from a sale cannot be reliably measured at the point of sale, typically due to uncertainties in collectability. By recognizing income as payments are received, businesses match revenue with the cash flows and ensure the earnings reflect the company's economic reality.
This practice is in contrast with recognizing the full revenue at the point of sale, which might not accurately portray the financial situation if there is significant doubt about collection.
Under the installment-sales method, companies recognize revenue and income over the period of the installment payments received from the customer. This means that revenue and income are recognized gradually as payments are collected, rather than deferring them until full payment is received.