Exercise 3.4Identifying debits and credits.

In each of the following sentences, fill in the blanks with the word debit or credit:

1. Revenue accounts normally have ? balances. These accounts increase on the ? side and decrease on the ? side.

2. Liability accounts normally have ? balances. These accounts increase on the ? side and decrease on the ? side.

3. Expense accounts normally have ? balances. These accounts increase on the ? side and decrease on the ? side.

4. Asset accounts normally have ? balances. These accounts increase on the ? side and decrease on the ? side.

5. The owner’s capital account normally has a ? balance. This account increases on the ? side and decreases on the ? side.

Objective 3-3

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