Use Carnival Corporation's balance sheet to answer the questions that follow.

1. Which current asset reflects deferred expenses? Explain what it means to defer expenses, and give the adjustment to the accounting equation that was probably made to record this asset.

2. The liabilities section shows over $2.5 billion in customer deposits at November 30, 2008. Explain why this is a liability, and give the transaction (in the accounting equation) that resulted in this liability.

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Carnival Corporation & PLC Consolidated Balance Sheets (amounts Ih millilone, except par valuee) November 30 Assets Current Assets $ 650 $943 436 331 266 Cash and cash equivalents 418 315 267 Trade and other receivables, net Inventories Prepaid expenses and other Total current assets 1,650 1,976 Property and Equipment, Ne Goodwill Trademarks Other Assets 26,639 3,610 1,393 563 34,181 26,457 3,266 733 $33,400 $ Liabilities and Shareholders' Eqnity Current Liabilities Short-term borrowings Current portion of long-term debt Convertible debt subject to current put options Accounts payable Accrued liabilities and other Customer deposits 串256 串115 1,028 1,396 561 1,353 2,807 1,081 271 512 1,142 2,519 6,781 Total current liabilities 7,7356,313 645 Long-Term Debt Other Long-Term Liabilities and Deferred Income Commitments and Contingencies (Notes 6 and 7) Shareholders' Equity 786 Common stock of Carnival Corporation; $.01 par value; 1,960 shares authorized, 643 shares at 2008 and 2007 issued Ordinary shares of Carnival plc;串1.66 par value; 226 shares authorized; 213 shares at 2008 and 2007 issued Additional paid-in capital Retained earnings Accumulated other comprehensive (loss) income Treasury stock; 19 shares at 2008 and 2007 of Carnival 354 7,677 13,980 (623) 354 7,599 12,921 1,296 Corporation and 52 shares at 2008 and 50 shares at 2007 of Carnival plc, at c Total shareholders' equity (2,296 (2,213) 19,963 19,098 $33,400 34,181