Changing accounts

Go into the COA (Ctrl-A) and open up the liablity account and try and change the type of account to expense. This will work as long as you don't have any subaccounts for that account. If there are subaccounts involved then you will need to undo that hierarchy first.

Then you can *merge* the 2 expense accounts by following these directions found in the help file:

To merge two accounts of the same type From the Lists menu, choose Chart of Accounts . Make sure the accounts you want to merge are at the same hierarchical level. If they're not, move one account to the level of the other. Select the account whose name you don't want to use. Choose Edit from the Account menu button. Change the account name so that it is the same as the account you're merging with. Click OK. Click Yes to confirm that you want to merge the two accounts.

Yes, there are subaccounts. Materials is the main account, for example, and Misc Materials is the sub account. I know the help says to move any subs before merging the main account, but I have no clue where to move them to, and once moved, how to merge them into the existing expense account.

Just change them to be main accounts for starters. In other words go into each subaccount and uncheck the box that makes it a subaccount. Save the accounts. Do this for both the liability and expense accounts. Then you can change the type from a liability to an expense account. Once they are all expense accounts then you can merge the liability and expense accounts into the expense account. Now restore the subaccount structure on the remaining expense accounts. I would also check your memorized transactions to make sure that they are pointing to the correct expense account.