If we just want to track the total costs/expenses incurred for project cost categories of our projects (mostly internal such as construction of a fixed asset), we don't need project tasks, right? What we need is activity code? For example, for project A, we want to track the costs/expenses incurred for security, lighting and cables separately.

If you want to do budgets and compare budgets to actual then you need the project task Otherwise you should be okay with just activity code

I'm sorry but why do I need project task for activity code? I thought I can associate almost if not all of the transactions with activity code. I thought I can also use just the activity code for WBS and GL account-based budgeting.

The budgets on projects can only be entered once a project schedule is added (ie project tasks). If you want to use the normal financial budgets and use projects or segments in those that works without project tasks But the project profitability reporting requires project budgets and tasks