If The Retained Earnings Account Has A Debit Balance Then What?

Negative Retained Earnings / Retained Earnings Deficit 

If the Retained Earnings Account has a debit balance then it is a negative retained earnings or retained earnings deficit.

This is due to accumulated losses suffered by the business in previous accounting period. So, the company is unable to declare Dividend to shareholders / stockholders during the current accounting period.

A negative retained earnings is recorded in Stockholder’s Equity Section with the account title “Accumulated Deficit”