What type of transaction is being recorded when inputting a business lunch?

When inputting a business lunch in QuickBooks Online, the transaction is categorized as an expense. This is because business lunches are typically considered operational costs that the business incurs while conducting its activities. By categorizing it as an expense, you can accurately track the spending related to meals and entertainment, which can have tax implications and provide insights into your overall business expenditures.

Recording it as an expense allows you to allocate the cost to the appropriate expense account, making it easier to manage your finances and assess the profitability of your business. Expense transactions in QuickBooks Online are specifically designed for costs incurred by the business, and this categorization ensures that your financial statements reflect the true expenses of running your organization.