Unearned revenues relating to a one-year service contract are current liabilities until they are earned.

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Unearned revenues, also known as deferred revenues, are payments received in advance for goods or services that haven't been provided yet. For example, a one-year service contract. Until the services are delivered, the payments are considered current liabilities on the balance sheet. Once the services are provided, the unearned revenue becomes earned revenue and is recognized on the income statement.

Unearned Revenues Relating to a One-Year Service Contract Are Current