If it's finish sanded water might raise the grain. It's my understanding that for this reason naphtha is preferred, but I'm no expert.
Denatured alcohol is probably preferred over naptha (MSDS) or water (which will raise the grain). Practically speaking, I will spray a little water on wood in the shop to see what I am looking at from time to time. It's easier to keep around than a spray bottle of alcohol, although many wood shops with high end lumber do keep an alcohol spray bottle around. As long as the exposure to water is brief it's fine.
Denatured alcohol is the way to go. It isn't oily like naphtha, doesn't raise the grain like water, and takes longer to evaporate than acetone. Mineral spirits last a bit longer, but makes everything smell like a truck stop.