In June, Hitesh Limited received cash from trade receivables of £54,000. The company is registered for VAT and charges VAT of 20% on all the sales of services it makes. What is the correct double entry to record this receipt of cash from trade receivables?
A) Debit trade receivables control account £54,000, Credit cash £54,000.
B) Debit cash £54,000, Credit trade receivables control account £54,000.
C) Debit cash £54,000, Credit sales £45,000, Credit VAT £9,000.
D) Debit trade receivables control account £54,000, Credit sales £45,000, Credit VAT £9,000.
Correct Answer:
Verified
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