The modified accrual basis is a distinct system of accounting that:

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Revenues follow different recognition criteria between the two bases. There are additional differences; unlike accrual accounting, modified accrual accounting does not recognize long-term assets and long-term liabilities. Modified accrual basis is a distinct system of accounting that contains financial statements elements that appear nowhere else. Expenditures and fund balance are two examples. Expenses are not recorded. Under modified accrual accounting, revenues are recorded when they are both measurable and available to finance expenditures of the current period.
Modified accrual accounting is not equivalent to cash basis. Governmental funds record revenues before received and expenditures not expensewhen payable.
The Township of Thomasville's General Fund has the following net resources at year end:
F1F1F1S1F1F1F10$69,000 of prepaid insurance
F1F1F1S1F1F1F10$410,000 rainy day fund approved by the township governing board with specific conditions for its use
F1F1F1S1F1F1F10$2,500 of supplies inventory
F1F1F1S1F1F1F10$49,000 state grant for snow removal
F1F1F1S1F1F1F10$190,000 contractual obligations for the purchase of equipment
F1F1F1S1F1F1F10Outstanding encumbrance of $105,000 for the purchase of furniture & fixtures assume no contractual obligation
F1F1F1S1F1F1F10Total Fund Balance is $ 1,010,500

The Modified Accrual Basis Is a Distinct System of Accounting