spartan1

Other equity considerations include things like distributions/dividends which have, for the most part, nothing to do with liabilities. To your point about Equity not really being needed, this is an example of something that isn’t the residual of an assets minus liability entry. It is strictly an assets (cash) and equity(shareholder dist/dividend) entry. And in this case it’s slightly unique because it’s a debit to equity when you might typically think as equity/equity accounts as being positive for the most part.