What indicates a net loss on my work sheet - a Debit showing $500 or a Credit showing $700. I think it would be a Debit showing a net loss but I am still struggling with the full meaning of debit and credit.

Meeandera

A debit in the income statement indicates a loss or expense.
In accounting there are 5 categories of accounts (2 categories from the income statement and 3 categories from the balance sheet)
1- Expense (Debit side)
2- Revenues (Credit side)
3- Assets (Debit side)
4- Liabilities (Credit side)
5- Owners equity (Credit side)

Debits and credits are the most fundamental concepts in accounting, representing the two sides of each individual transaction recorded in any accounting system. A debit transaction indicates an asset or an expense transaction, a credit indicates a transaction that will cause a liability or a gain. A debit transaction can also be used to reduce a credit balance or increase a debit balance. A credit transaction can be used to decrease a debit balance or increase a credit balance.

Origin of the terms debit and credit
The term debit comes from the Latin debitum which means "that which is owing" (the past participle of debere "to owe"). Debit is abbreviated to Dr (for debtor). The term credit comes from the Latin credere/credit meaning "to trust or believe"/"he trusts or believes" via the French credit and the Italian credito. Credit is abbreviated to Cr (for creditor). [2] In bookkeeping, debit is defined as "an entry of a sum owing"; "side of an account (left-hand) on which such entries are made". Credit is defined as "the sum at a person's disposal in the books of a bank";"an entry on the credit [right-hand] side of an account". [2]

The idea of income being a credit and an expense being a debit, which were opposites and balanced off against each other to determine profit or loss, is fairly straightforward, as is the tradition of always entering debits on the left and credits on the right of an account. However, as the double-entry bookkeeping system was expanded to cover assets and liabilities things became more complicated. Every transaction consists of a pair of matched opposites called a debit and credit, but they don't necessarily refer to simple concepts like income and debt which can be confusing. The debit is just the left-hand component and the credit the right-hand one. [1]