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Modified accrual accounting primarily measures current financial resources, making it an essential method used in government accounting. This approach combines features of both cash basis and accrual accounting. It recognizes revenues when they are available and measurable, and it records expenditures when the related liability is incurred. This focus on current financial resources allows government entities to track their liquidity and ensure they can meet their short-term obligations, which is crucial for effectively managing public funds.

In contrast, options that focus on future financial commitments or long-term economic resources pertain to measures commonly evaluated using different accounting frameworks. Future financial commitments are more relevant in contexts involving long-term planning but aren't captured in the modified accrual approach. Long-term economic resources, on the other hand, are considered under a full accrual basis of accounting, which provides a broader picture of overall financial health, encompassing all resources including capital assets and long-term liabilities. The private sector financial health does not align with the government-focused nature of modified accrual accounting, which is specifically tailored to track and report on government financial activities and resources.