Hi, you've probably noticed that when using PayPayl the system actually creates a Sales Quotation, the standard process seems to be manual from Sales Quotation->Sales Order->Invoice->Validate Invoice->Submit Payment

Also as you have probably found that when submitting a payment the only options are 'Cash' or 'Bank or Check', these options are actually taken from the accounting journal. To do this you need to select Accounting->Configuration->Journals->Journals you can then create a new journal entry specifically for Paypal set it as either type 'Cash' or 'Bank and Checks' and also link to the correct default  debit and credit account either cash or bank account, if you want a separate account to link to this journal entry then you will first need to add a new account to Accounting->Accounts->Accounts and select the appropriate accounting type