Final answer:
True, deferred gross profit is treated as unearned revenue and is classified as a current liability, reflecting profit not yet fully earned and representing an obligation on the balance sheet.
Step-by-step explanation:
The statement that deferred gross profit is generally treated as an unearned revenue and classified as a current liability is True. Deferred gross profit occurs in situations such as installment sales where revenue is recognized over time as payments are received. It reflects the profit that has not yet been fully earned and is, therefore, not recognized as revenue in the income statement. Instead, it is reported as a liability on the balance sheet because the earned portion of the profit has not yet been realized, which is in line with the revenue recognition principle. This unearned revenue represents an obligation to deliver goods or services in the future or, in some cases, a potential for returns or other adjustments.