Final answer:
Demand deposits appear on the liabilities side of a commercial bank's balance sheet, representing customers' funds held by the bank.
Step-by-step explanation:
The entry that would appear on the liabilities side of a commercial bank's balance sheet is E) Demand deposits. This is because demand deposits are the customers' funds that are held by the bank and can be withdrawn on demand by depositors. Other entries like mortgage loans and government securities represent a bank's assets, as they are either money owed to the bank or investments made by the bank and thus earn interest. Cash reserves and foreign currency reserves are also considered assets because they are either cash on hand or assets that can be liquidated.