During January, Meera Limited Makes Credit Purchases of Goods for Resale

Multiple Choice

During January, Meera Limited makes credit purchases of goods for resale at a net cost of £42,000. Meera Limited's suppliers charge 20% VAT on the net cost of purchases. What is the correct double entry to record these credit purchases of goods for resale?

A) Debit purchases £42,000, Debit VAT £8,400, Credit trade payables control account £50,400.
B) Debit trade payables control account £50,400, Credit purchases £42,000, Credit VAT £8,400.
C) Debit purchases £42,000, Debit VAT £8,400, Credit cash £50,400.
D) Debit purchases £35,000, Debit VAT £7,000, Credit trade payables control account £42,000.