When I reconcile my credit card statements I look at each receipt. Most receipts will match one category such as "groceries". And Quicken automatically fills those in for me in most cases. But I buy various things from some stores, so sometimes it might be "software" or another time "entertainment" for example. And yes, I look at each receipt when I reconcile my statements and make sure the category is correct, including the very rare split. For travel spending it is broken out by lodging, dining, tours, transportation, etc. I find that level of granularity useful for trip planning purposes, and it's usually by receipt, not the items listed on the receipt.
Most of my Costco receipts are under grocery, but monthly there is at least one prescription purchase which will be a separate receipt, so I make sure that is listed as medical prescription - that might become important for tax purposes as well as budgeting. Or if we bought a ladder, or something for the garden, or home "office", or tax software those will go in different categories.
Sounds like pretty much what NW-Bound does too. And I also have category fuel, and subcategories auto and motorhome. Same for maintenance, parts, repairs, registration, etc. I like to have the vehicle expenses split out.
So I make sure categories match before I run my YTD spending report to see the breakdown.