That´s because your screen is not capable of displaying the true size of the Full HD, so it put´s the black bars to fit it, even when you are not full screen there´s space betwen the top and the bottom, you don´t see the black bars but you can see the empty space that is you desktop picture or backgroun programs.
When you put it on full screen you see that it says current size smaller as you proyect real size, that means that it can´t open it full.
Try watching your video on a Full HD monitor, like a new iMac or a 27 inch screen and you should see it complete and be out of doubts.
The 1.85 it´s a academic standard for projecting movies, that´s why even when you are watching a bluray movie it has the black bars in the top and bottom because it was filmed without that space in consideration even thou it´s being filmed or recorded.