The sort order determines the order the entries are printed on the report.

Entry Select Entry if you want to print the entries in the order that they were entered (reference number).
Type Select Type if you want to sort the entries by type and print a subtotal for each transaction type. The entries for each transaction type will print in chronological order.
Date Select Date if you want to sort the entries by transaction date and print a subtotal for each date. The entries for each date will print in entry order.