Explanation:

In a company’s trading account if the debit side i.e. the expense side is in excess of the credit side i.e. the income side it is said to have earned a gross loss. The amount calculated is the balancing figure to be put on the credit side as a part of balancing the account.

Debit Side (Direct Expenses) > Credit Side (Direct Incomes)

Gross Loss is transferred to the profit and loss a/c on the debit side and further added to the expenses incurred in the current period.