I get a lot of questions from PCLAW users about the difference between 
expense and recovery accounts. Questions like why is there two GL
accounts for Faxes and should I use the Fax Expense
or the Fax Recovery? Well, here is an explantation on which one to use and how they will effect your income statement.
Use the Expense Account if you just want to see how much your COMPANY spends. For example if you spend $75 on Faxes in the month of June and $25 was Client Related your Income statement would show $50 of fax expenses.
If you use the Expense and Recovery accounts you would get a difference Income Statement. For Firm expenses you would use the Expense GL but for client expense, you would use the Recovery GL. Your Income statement will now show $75 of Fax Expenses and $25 of Fax Recovery
The net is still $50.
So it is all about how you want your Income Statement to look. Talk with your CPA and Financial advisor.
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