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<chapter id="chapter_expenses">
  <title>Expense Accounts</title>

  <para>If managing your checkbook is the first step in tracking your finances, then using expense accounts
    to see where you are expending money is a close second step. This chapter will give you an
    understanding of how &app; uses expense accounts to help you keep track of many different
    categories of transactions.
  </para>

  <sect1 id="expenses-concepts">
    <title>Concepts</title>

    <para>An expense type account is used to allow you to track how much you spend on specific expenses. Many
      people's first experience with tracking expenses comes from Quicken(tm), where transactions
      can be assigned to one or more categories. In &app;, these categories are set up as separate
      accounts, which are designated as Expense type accounts. This allows &app; to apply the rules
      of double-entry accounting consistently. Expense accounts can be as detailed or as general as
      you need. Some users need only a few accounts for personal expense tracking. Others use &app;
      expense accounts to manage their expenses in great detail. The level of detail you choose is
      up to you. Keep in mind that with &app;, you can change accounts for transactions, so if your
      needs change later on, it is possible to move transactions around.
    </para>
  </sect1>

  <sect1 id="expenses-setup">
    <title>Setting Up Accounts</title>

    <sect2 id="expenses-su-simple">
      <title>Simple Expense Account Setup</title>

      <para>For many users, the easiest way to set up expense accounts is to check the "Common Accounts" when
        you create a new Account Hierarchy. This will establish many of the most common expense
        accounts that users need. See "New Account Hierarchy Setup" in Chapter 3 of the &app; Manual
        for more information.
      </para>
    </sect2>

    <sect2 id="expenses-su-complex">
      <title>Complex Expense Account Setup</title>

      <para>If you have different expense accounting needs, you can refer to
        <xref linkend="chapter_txns"></xref>, or Chapter 5.4 in the &app; Manual for instructions on
        how to create accounts.
      </para>

      <para>Typical reasons for adding new or different expense accounts include: to track expenses for
        particular business purposes (e.g., specific types of supply expenses), to track expenses
        for particular tax purposes (e.g., tax expenses that must be reported to others), or simply
        to track expenses that are meaningful to you (e.g., payments made to a particular charity).
      </para>
    </sect2>
  </sect1>

  <sect1 id="expenses-entering">
    <title>Entering Expense Transactions</title>

    <para>While it is possible to enter transactions directly into expense accounts, it is not normally how
      these are entered. For most people, transactions for an expense account are added when the
      user is entering data into the other account in the transaction. In other words, if you have
      an expense account for Charitable Donations (e.g., Expenses:Charity), you will typically add a
      transaction to the expense account by assigning a check in your checking account register to
      the Charity account.
    </para>

    <para>If you open an expense account, you will see a register similar to most others you find in &app;.
      The informal column headings for the transaction amounts are slightly different, however. The
      left (debit) column will read <emphasis>Tot Expense</emphasis>, while the right (credit)
      column will read <emphasis>Tot Rebate</emphasis>.
    </para>
  </sect1>

  <sect1 id="expenses-other">
    <title>Other Considerations for Expense Accounts</title>

    <para>Because expense accounts are generated entirely by you, there are no statements against which you
      would reconcile your data. Therefore, there is technically nothing to reconcile. You can, of
      course use the reconcile process for expense accounts, which will lock the transactions for
      future editing.
    </para>

    <para>One point to consider is that as your use of &app; continues, the balances in these accounts will
      grow, since there are usually very few credit transactions that reduce the balances. There is
      nothing wrong with this situation, but some users may wish to clear the balances in their
      expense accounts periodically. Zeroing transactions can be entered that transfer the balance
      of the account to an Equity account. &app; includes a Closing Books procedure that includes
      zeroing out expense accounts. Keep in mind that this is not necessary, and that if you need to
      gather information on a given expense account, you can use various reports to extract that
      data without zeroing the account out.
    </para>
  </sect1>
</chapter>
