When Income come in equity side of balance sheet as Retain earning, on which side loss come in balance sheet?

Answer 1

A profit or net income is taken to Retained Earnings on the credit side. A loss is taken to Retained Earnings on the debit side. Let's say RE balance at 1.1.2007 was $100,000 (Credit). During 2007 the co. made a profit of $40,000, so the RE balance at 31.12.2007 will be $140,000 (credit). But if during 2007 the co. made a loss of $40,000, the RE balance at 31.12.2007 will be $60,000 credit ($100,000 minus $40,000).