Under the "cost recovery method," after the cost of the merchandise sold on an installment basis has been recovered,any cash collected in excess of this amount is recorded as recognized gross profit on the seller's income statement.

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This statement is true under the cost recovery method. Once the cost of the merchandise sold is recovered through installment payments, any additional cash collected is recognized as gross profit on the seller's income statement.

Under the "Cost Recovery Method," After the Cost of the Merchandise