Final answer:
Unearned revenues are considered liabilities until the service is provided or goods are sold.
Step-by-step explanation:
True, unearned revenues are considered as liabilities until the service is provided or goods are sold. Unearned revenues are funds received in advance from a customer for goods or services that are yet to be delivered. They are initially recorded as a liability because the company has an obligation to provide the goods or services in the future.
For example, if a company receives payment from a customer for an annual magazine subscription, the unearned revenue is recorded as a liability on the balance sheet until each monthly issue is delivered. As each issue is provided, the liability decreases and revenue is recognized.