I really hate to tell people this and kill the illusion, but we (the users of this forum) are not mind readers. Sorry. We don't know enough about your business to tell you what kind of services you are buying, so we can't answer your question. I could guess Bindery Expenses, Plumbing Expenses or Promotional Items Expenses, but I'm guessing that answer might not be useful to you if you don't run one of those types of companies.

So let's start here with some background because I am assuming you are new to service items. Service items can have linked accounts but they are not mandatory. I recommend at least putting in a Revenue account to help speed up sales data entry and reduce the thinking required to post invoices, all the while tracking what you are selling in the reports.

However, many people are not aware that you can use service items in purchases as you are trying to do. In this manner, you can track what you buy of a specific service and automatically assign an expense account for the purchase so you don't have to do it on the purchase invoice. Some people think that because there is a field, it is required (required fields have a red asterisk). Both revenue accounts and expense accounts can be changed during data entry but the recommended use is that you set it once and don't change it, typically. You don't have to use service items in purchase invoices.

Again, typically a service item would be set up to track what you are selling (though you can have expense-only service items if you wish). If you use outside services to help support those sales, you can assign expenses to the items as well to help speed up your data entry and give you another level of reporting.

So let's go back to the Bindery expenses. You may print books and typically you staple them to bind them. But your client wants proper book binding. You can print the book, but not bind it. So you print it and send 1000 copies to a company that can do the bindery. You could use a BookBindery expense-only service item and use the Bindery Expense account as the linked Expense to record the expense invoice. If you put the BookBindery service item on a sales invoice, you would also wish to assign the Bindery Revenue account to the Revenue linked account.

Assigning the correct expense account, as you have probably already figured out now, is based on what you are buying and which service item code you are using. Typically I don't use service items for overhead-type expenses (eg. phones, office supplies, hydro, insurance), only for those expenses that are passed along to the client and I wish to track in the Service item reporting. So first decide if you wish to track it and second, decide which service you sell is associated with the cost. BTW, I've never put an Activity on a purchase invoice so I don't know how it would react off the top of my head, without doing some testing on the data entry and reporting.

I am not sure if this really answers your question but if not, please provide some more information about what type of services you are buying and selling.

I'm sorry I wasn't specific, I am talking about putting in a sales invoice. We offer plumbing services..so when I put a new item in, I don't have to link it to an expense account?

That's correct. If you used the item in a Purchase invoice, then you might want to have an Expense account linked so there is always some consistency in how you do the data entry and which account gets the expense.

But if you are only using the items in Sales, then you do not need a linked Expense account.

If you subcontracted work to an external service tech/plumber for a larger job where you needed more people, then maybe using a service item with a linked expense account to record the expenses he or she will bill you, might be something you wish to do.

what linked account do you use for the expense?

(there's no red asterisk beside the account pick list, so it isn't mandatory to pick one)

Choose the account that you would like it expensed to, if / when you purchase that service.

It's there only to make data entry easier / faster.  You can leave it blank and enter it on the invoice screen. 

P.S. Richard Ridings' answer above did not yet display at the time I posted this. 

thank you!!