Final answer:
The statement is true; revenue is recognized under the completion-of-production basis when agricultural crops are harvested because the sales price is considered assured and distribution costs are minimal. Market conditions, however, can influence prices and overall revenue.
Step-by-step explanation:
Under the completion-of-production basis, companies recognize revenue when agricultural crops are harvested since the sales price is reasonably assured and no significant costs are involved in product distribution. This statement is True. The rationale behind this approach is mostly associated with the nature of agricultural activities, where costs are largely sunk into the production process, and the harvest often confirms the Marketable quantity. However, it is also important to recognize external factors such as market conditions that can affect prices and subsequently revenue. For example, a surge in production can lead to an oversupply that drives prices down, thus decreasing revenue, while a bad harvest due to poor weather can lead to higher prices and increased revenue for the farmers. The economics of supply and demand play a significant role in determining the final income from selling a farm's product.