Every matter's chart of accounts has five sections, in this order: Asset Accounts, Liability Accounts, Equity Accounts, Income Accounts, and Expense Accounts. Pick the type by asking what the account represents.

Asset accounts

Things the estate holds, such as bank and brokerage accounts, real estate, vehicles, and other property. Deposits raise an asset's balance and payments lower it. Asset accounts appear on the Inventory report, and they are the accounts you pick on the Transactions tab when you record money coming in or going out.

Liability accounts

Debts and obligations the estate owes, such as a mortgage or an unpaid bill. A liability's balance goes up when the debt grows and down when you pay it. Liabilities appear on the Inventory report and reduce Net Estate Value. You can pick a liability account on the Transactions tab too, to record what is owed or paid on it.

Equity accounts

Equity is the estate's net value. Every matter starts with two equity accounts:

Opening Balance Equity. The other side of each opening balance you record. It is a regular account. See Record opening balances.
Net Income (Loss). A system account. Its balance is always the matter's total income minus total expenses, so transactions posted directly to it do not change the balance it shows. It carries a System badge, and you cannot edit, move, or delete it.

You can add your own equity accounts. The account picker describes equity accounts as covering opening balances and distributions.

Income accounts

Categories for money the estate receives, such as interest, dividends, and rent. An income account doesn't hold money. It labels where a deposit came from.

Expense accounts

Categories for money the estate pays out, such as legal fees, taxes, and utilities. Like income accounts, they label activity rather than hold money.

Income and expense accounts feed the Income Statement and the Income Received and Expenses Paid sections of the Combined Account report.

How a transaction is labeled

You never choose a transaction type. Estate Bookkeeper works it out from the account the money comes from and the account it goes to:

Income. From an income account into an asset account.
Expense. From an asset account into an expense account.
Transfer. From one asset account into another.
Opening balance. From an equity account into an asset account.
Liability opening balance. From a liability account into an equity account.
Borrow. From a liability account into an asset account.
Repay. From an asset account into a liability account.

Any other pairing is treated as a transfer.

Account types and when to use each