Final answer:
Delayed recognition of revenue is appropriate if the sale does not represent substantial completion of the earnings process. This statement is true.
Step-by-step explanation:
Delayed recognition of revenue is appropriate if the sale does not represent substantial completion of the earnings process. This statement is true.
Revenue recognition refers to when a company recognizes revenue on their financial statements. For revenue to be recognized, the earnings process must be completed or substantially complete. If the sale does not represent substantial completion of the earnings process, the revenue should be recognized at a later time when the earnings process is completed.
For example, if a company sells a product but there are still significant obligations to be fulfilled, such as warranty or installation services, then the revenue from that sale should be recognized at a later date when those obligations are completed.