It doesn't, the Equity account displays a negative number if the company is in the green (it decreases when you emit stocks), the Expense account displays posit

It doesn't, the Equity account displays a negative number if the company is in the green (it decreases when you emit stocks), the Expense account displays positive numbers (it increases when you spend money), the Income account displays negative numbers (it decreases when you earn money). In beancount, the accounting equation is Expense+Income+Equity=0 and all signs are always left intact (there is only addition). So you start a company with a seed capital of $5. You borrow $5 to the bank, buy an expensive apple for $10, sell it for $15 and give the money back to the bank with an interest of $1, then close the exercise and carry the profits (don't distribute dividends). Your ledger is: Initial capital Assets:Cash +5 USD Equity:Seed -5 USD Borrow to the bank Assets:Cash +5 USD Liabilities:Bank -5 USD Buy an apple Assets:Apples +10 USD Assets:Cash -10 USD Sell the apple Income:Sales -5 USD Assets:Apples -10 USD Assets:Cash +15 USD Reimburse the bank Liabilities:Bank +5 USD Expenses:Interest +1 USD Assets:Cash -6 USD Close the exercise # beancount does that for you for any time period btw Expenses:Interest -1 USD Income:Sales +5 USD Equity:PreviousProfit +4 USD Notice how every transaction balances to 0 just by summing it, no need to remember anything. Now, you're at the beginning of the next exercise. To know your accounts you just compute a sum of every operation to it, again no special case. So your accounts are: Expenses 0 USD Income 0 USD # as expected at beginning of exercise Assets:Apples 0 USD Assets:Cash 9 USD Liabilities:Bank 0 USD Equity:Seed -5 USD Equity:PreviousProfits -4 USD And yet again, the sum of all of that is 0. Personally I like it, not having any special cases. Yes, it may confused an accountant (because they learned the special cases by heart ! Somebody coming with a fresh mind has no reason to be confused, it's all just conventions !) but it's simpler for me and just as consistent.