In certain Airports eg MIA, probably others also, it used to be possible to Transit if you were arriving and leaving on the same airline. AA used to have such a system, but it was very cumbersome and more efficient simply to go through Immigration, enter the country, and then go to the appropriate Departure Gate, providing your connection time allowed... more time consuming these days. No problem in putting down 'In Transit' and the onward city. I'd also keep your ticket or onward boarding pass handy as proof of travel - they'll want to know you're actually intending to leave.
2 hours at LAX is OK - but it's a spread-out airport and checking the map for the layout might be time well spent.