When Delta Airlines sells tickets for future flights, it debits Cash and credits an account entitled

Air Traffic Liability $($Passenger Revenue Earned is recorded only when passengers are provided

flight services$).$ The Air Traffic Liability account, reported recently at approximately $$4\mathrm{.}9$ billion,

is among the largest liabilities appearing in the company$$s balance sheet.

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 $$90,000.$ Record the entry Delta Airlines would make upon completion of this

flight.