Final answer:
The statement given is true. Modified accrual basis of accounting recognizes revenues when they are measurable and available and expenses when resources are consumed.
Step-by-step explanation:
The statement that 'The basis of accounting under which revenues are recognized when measurable and available for spending and expenses when resources are consumed is the modified accrual basis of accounting' is True. The modified accrual basis of accounting is a method that combines elements of both cash and accrual accounting, fitting for governmental and non-profit organizations. Under this method, revenues are recognized when they become measurable and available, meaning they can be reasonably estimated and are collectible within a certain period to fund the current period's expenditures. Conversely, expenses are recognized when the related goods or services are received, regardless of when the payment is actually made.
In relation to real GDP, which is a key measure of the health and size of an economy, the accounting principles used help establish a more comprehensive picture of the economic activity. Real GDP encompasses the total value of all final goods and services produced over a specific time period and reflects production, spending, and income generation within an economy.