AAC format How should I setup

Hi I have a Yamaha RX-V475 AV Amp and I belive it is multichannel capable receiver. Physically, I have just two speakers connected to the amp.

I would like to get the best sound possible and I’m wondering how to set up the sound settings for kodi especially with regard to AAC 2.0 and 5.1 stereo files which seem to be ‘everywhere’.

So at the moment in sound settings i have set kodi to 2.0 for number of channels. But what if I play a 5.1 AAC video file, shouldn’t it set setting to 5.1?

And should I also think about using the transcode option too to get better sound for the AAC?

Sorry I’m a bit of a noob with all of this, appreciate any help…