Labor is used for outside labor that you use for projects; you can enter a cost for the service and apply it to cost of sales when selling the labor item. Use this for labor that you can apply to your general ledger salary and wages account.
G/L Sales/Inc: Enter the default income account that will be credited when you sell labor.
G/L Invtry/Wage: Enter the default salary and wages account that will be debited when you purchase labor and credited when you sell the labor.
G/L Cost Sales: Enter the default cost of sales account that will be debited when you sell labor.
Note: If you are using Time & Billing (Sage 50 Premium Accounting and higher) and you do not want the labor to directly affect cost of sales, use activity items in place of labor items.