If you are just about to start college and are going for a four-year degree, you are well aware that you'll owe tuition for the next four years. However, you don’t have to pay all four years in advance. For accounting purposes, you would list your future tuition under "deferred long-term liability charges" on a balance sheet. These are charges you know you will have to pay in the future but are not due in the current accounting year.
Other items might be deferred taxes that would be due the following year and other kinds of future obligations. There must be a tax loophole in there somewhere.
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