What entry type transfers account balances between accounts on one financial statement?

The correct answer is reclassification entry. This type of entry is specifically designed to transfer account balances between accounts on one financial statement without altering the overall financial position of the entity. For example, if a company wants to move an amount from one income category to another within the income statement, a reclassification entry is made to reflect this change appropriately.

In contrast, adjustment entries typically involve correcting or updating account balances to reflect the true financial position based on accruals or deferrals. Reversal entries are used to undo certain transactions, usually pertaining to accruals or estimates made in prior periods. Correcting entries are utilized to fix an error in previously recorded transactions. While all these other entries serve important roles in accounting, they do not specifically relate to transferring balances between accounts on a single financial statement in the same way that a reclassification entry does.