Expense categories in accounting are the major divisions of expense accounts that are used to classify and record business costs or expenditures. The most common expense categories include labor, materials, supplies, equipment, travel, entertainment, legal, marketing, and utilities. Understanding these expenses is key for any business because expenses must be properly tracked and accurately monitored to ensure the success of a company. By categorizing and reporting expenses accordingly, businesses can make sound financial decisions and ensure they are on track with their goals.