Final answer:
Revenues are recognized under the modified accrual basis of accounting when they are available and measurable to finance current period expenditures; thus, the correct option is b. Available.
Step-by-step explanation:
Under the modified accrual basis of accounting, revenues should be recognized when they are both measurable and available to finance the expenditures of the current period. This approach is different from the full accrual accounting, which recognizes revenues when they are earned regardless of when they are received. Therefore, the correct answer is b. Available. An example of this could be property taxes that are levied by a government. They are considered available when they have been collected within a certain period after year-end and are measurable when the government can determine the amount with reasonable accuracy.
Under the modified accrual basis of accounting, revenues should be recognized when earned. This means that revenues are recognized when a company has completed the services or delivered the goods to the customer, and the customer is obligated to pay for them. The timing of recognition is not dependent on the availability of funds, whether the revenue is realized or spent.