What is the difference between a Transfer and Expense entry?

Transfer: A transfer moves money between accounts, such as from a checking account to a loan account or between similar accounts. Transfers do not affect your net worth because the funds are simply shifting from one account to another.

Expense: An expense represents money spent or costs incurred, like buying food, paying bills, or other purchases. Expenses decrease your net worth because they involve spending funds rather than just moving them between accounts.