Consignor

When goods are sent by the manufacturer or the producer to the buyer, the act is referred to as
consignment where the owners of the goods send the goods to their agents in another location. The
goods that are sent in this manner are referred to as consignment while the sender is called the
consignor. The main document that is drawn up as a contract by the carrier enters the name of the
sender as the consignor.

consignor and consignee

Consignee

In a consignment, the receiver of the goods is termed as the consignee. A consignee is only a receiver
and not the owner of the goods. The ownership is transferred only when the consignee has paid the
consignor, in full, for the goods. In most cases, a consignee is only an agent receiving the goods from the
consignor. It is important to remember that the person who receives the goods in a consignment is
always a consignee. Whether he is the buyer or an agent receiving the goods with the intention of selling
is of no concern to the carrier who enters his name as the consignee in the documents pertaining to
consignment.

Declaration of Dividend Paid in Cash

Dividends become payable after a company's board authorizes or declares dividend payments. The
journal entries to record a dividend declaration are to debit retained earnings and credit dividends
payable, which is a current-liability account in the liabilities section of the balance sheet.

This non-cash transaction shifts an amount from the shareholders' equity section to the liability section
of the balance sheet. There is no impact on the statement of cash flow.

Dividends are classified under current liability because the cash payments are typically made within a
few weeks of the announcement. For example, if a company declares a 50-cent-per-share dividend on
May 1 and it has 100,000 shares outstanding, the journal entries to record this declaration are to debit
retained earnings and credit dividends payable by 50 cents multiplied by 100,000, which is $50,000.

Payment of Dividends

Companies pay announced dividends on the payment dates indicated in the dividend announcements.
The journal entries to record a cash dividend payment are to debit dividends payable, which removes the
dividend liability from the balance sheet, and credit cash. Dividends are a cash outflow in the financing-
activities section of the statement of cash flow.
Continuing with the earlier example, if the company pays the cash dividends on June 15, the accounting
entries to record this payment are to debit dividends payable and credit cash by $50,000 each. This
reduces cash flow for the period by $50,000.