When Delta Airlines sells tickets for future flights, it debits Cash and credits an account entitled Air
Question:
a. Explain why this liability is often referred to as a deferred revenue account.
b. What activity normally reduces this liability? Can you think of any other transaction that would also reduce this account?
c. Assume that, on a recent flight, passengers of the airline used tickets that they had purchased in advance for $105,000. Record the entry Delta Airlines would make upon completion of this flight.
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a At the time cash is collected by Delta Airlines for advance ti...View the full answer
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Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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