Accounting categories for business expenses are the most basic and essential method of tracking how a business spends its money. By tracking expenses, businesses can understand their financial situation, plan for the future, and minimize unavoidable costs. Expenses may be classified into different types, such as cost of goods sold, operating expenses, travel & entertainment, and depreciation & amortization. Knowing what category certain expenses fall into is important in order to properly analyze financial transactions that are made. This category system can help ensure accuracy and consistency when it comes to accounting for expenses.