Fred Baxter, VP of finance for Pacific All Risk Insurance wants to know the following: Which of the following statements is true of expenses? Expenses increase stockholders' equity, so an expense account's normal balance is a debit balance. ) Expenses decrease stockholders' equity, so an expense account's normal balance is a debit balance. Expenses decrease stockholders' equity, so an expense account's normal balance is a credit balance. Expenses increase stockholders' equity, so an expense account's normal balance is a credit balance