Final answer:
The statement is False; fines and forfeits are recognized as revenue under the modified accrual basis when they are both measurable and available, and not necessarily at net realizable value.
Step-by-step explanation:
The statement that under the modified accrual basis of accounting applicable to governmental fund types, revenue from sources such as fines and forfeits is accrued and recorded at net realizable value is False. Under the modified accrual basis, revenue must be both available and measurable before it is recognized. Availability means that the revenue is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Measurable means that the amount can be determined with a reasonable degree of accuracy. Therefore, fines and forfeits are recognized as revenue in the accounting period when they are both measurable and available, meaning they can be collected soon enough after the end of the period to be used to pay current-period bills.
Federal, state, and local governments finance their expenditures through various revenue sources. While federal government tax revenues increased substantially after the Sixteenth Amendment, which allowed income tax collection without apportioning by state population, all levels of government collect significant revenue. For instance, as of fiscal year 2017, revenues had surpassed $6 trillion, showing an exponential growth since World War II.