Hello,

I have a transaction involving an Asset account with a positive value Increase and positive value Balance as expected.

The corresponding Income Category displays an expected positive value in the Income column, but an unexpected negative value Balance shown in red like it's a bad thing.

However, a default "Income and Expenses By Year" Report shows a positive Income as expected.

Am I missing something?

I suppose it may be counterintuitive, but think of an income category as a type of money source paying you. It is a positive income for you, but an expense for the category, thus it being shown as negative. When you buy something, the balance in the category increases, but the balance in your account (checking, for example) decreases. The only reason it isn't shown in red is that it is (usually) above zero.
Does this make it any clearer?

Sort of, if I think of transactions as money moving from credits to debits. So even though income is 'incoming', it's flowing through to asset like cash. Then expenses are moving from cash credits to an expense debit.

But it seems conflicting when I think of Assets = Liabilities + Equity, with a growing positive cash balance equaling a growing positive income balance.