Question

Why is reverse shown in the liability side of the balance sheet?

Answer 1

After the dividends are paid, the dividend payable is reversed and is no longer present on the liability side of the balance sheet. ... As a result, the balance sheet size is reduced. Retained earnings are listed in the shareholders' equity section of the balance sheet.

Answer 2

Answer:

In a balance sheet, why are reserves and surplus shown on the liability side? ... It is called so because it is the amount that will be left with the owner after assets have been utilized to pay off all the liabilities. You may also say that this is the amount that the business owes to its owner.