EXERCISE 2.1 Test 1. Fill in the blanks. The account types determine how increases or decreases in it are recorded. Determine whether the word debit or credit is appropriate for each statement. Write debit or credit on the blanks. 1. Asset accounts normally have balances. An increase in asset recorded as a while decrease in asset is recorded as a 2. Liability accounts normally have balances. An increase in liability is recorded by a and a decrease is entered as a The owner's capital account normally has a balance. This account increases on the side and decreases on the side. 4. Income accounts normally have balances. These accounts increase on the side and decrease on the side. 5. Expense accounts normally have balances. These accounts increase on the and decrease on the side. 3. side