An adjusting entry normally affects

A) balance sheet accounts only
B) income statement accounts only
C) an income statement account and a balance sheet account
D) balance sheet accounts or income statement accounts only

Adjusting Entry

An accounting entry made into a ledger after the reporting period has ended, to record previously unrecorded revenues or expenses or to correct inaccurate entries.

Income Statement

An income statement is a financial document that shows a company’s revenues, expenses, and profits over a specific period, illustrating the profitability of the business.

Balance Sheet

A financial statement that provides a snapshot of a company's financial position, including assets, liabilities, and equity, at a specific point in time.