When adding a new nominal account you may wish to consider which category to place the account under based on the following guide:
Profit and Loss Categories
Sales
If the account will be for a type of sale you are making to your customers use this category. These accounts will be available when entering a sales invoice.Purchases
Use this category for items that will be purchased and resold in your business or used to render services to your clients. Such items can include building materials (for construction workers), stock items, and other outsourced services.Expenses
Expenses are direct costs to your business that enable you to promote and fulfill your services. For example, advertising and marketing, sub-contractor fees, sales commission etc.Overheads
Overheads are fixed administrative costs such as rent, utilities, staff wages, stationery, printing etc.Balance Sheet Categories