For example, if the difference between the total revenue and expenses is a profit of $1,400 , credit the amount in the retained earnings account, to zero out the income summary account.

If there is a loss, the opposite happens, with retained earnings decreasing with a debit and being balanced by a credit to net income. Here's your cheat sheet Debits and credits can be a bit ...

Since retained earnings is an equity account that has a normal credit balance, a debit to the account reduces its balance -- in this case by $24,000.

The National Credit Union Administration will temporarily lift a requirement that some credit unions meet retained earnings standards as part of an effort to help the industry weather the economic ...

Retained earnings increase when there is a profit, which appears as a credit. Therefore, net income is debited when there is a profit in order to balance the increase in retained earnings.