What type of account is used to reserve funds for encumbrances in governmental accounting?

In governmental accounting, reserves for encumbrances are specifically recorded in a special account known as the Budgetary Fund Balance Reserve for Encumbrances. This account indicates that funds have been set aside for obligations that are expected to occur as a result of the encumbrances, ensuring that the budget reflects these future outflows.

The purpose of this reserve is to help manage the budget by accurately tracking resources that are already committed, thus providing a clearer picture of the remaining funds available for future spending. This practice also supports accountability and transparency, as it aligns with the principle of matching revenues and expenditures within the fiscal period.

Other types of accounts, such as expenditures control or estimated revenues control, do not specifically serve the function of reserving funds for specific encumbrances. Instead, expenditures control tracks actual spending, while estimated revenues control focuses on anticipated revenue collections. Other financing uses control relates to transfers and inter-fund activities, further differentiating it from the specific purpose of reserving funds for future encumbrances. This specificity reinforces why the Budgetary Fund Balance Reserve for Encumbrances is the correct answer.