Introduction:
In this scenario, the firm made a purchase of goods worth Rs 20,000 from a certain employee. However, the transaction was incorrectly recorded in the purchases account instead of directly debiting the employee's account. Despite this error, the employees were still paid their salaries after deducting the amount owed to the firm.

Explanation:
There are a few possible reasons for this mistake and subsequent payment of salaries to the employees:

1. Lack of Proper Documentation:
The firm might not have maintained proper documentation regarding the purchase of goods from the employee. As a result, the transaction was mistakenly recorded in the purchases account instead of debiting the employee's account directly.

2. Accounting Error:
It is possible that there was an accounting error while recording the transaction. The person responsible for recording the transactions might have mistakenly debited the purchases account instead of the employee's account.

3. Internal Control Weaknesses:
The firm may have weaknesses in its internal control system, which allowed for such errors to occur. There might be a lack of segregation of duties, where the same person is responsible for both recording transactions and making payments to employees.

4. Lack of Communication:
There might have been a lack of communication between the departments responsible for recording transactions and processing employee salaries. As a result, the mistake went unnoticed, and salaries were paid without considering the outstanding amount owed by the employee.

Resolution:
To rectify this error, the following steps can be taken:

1. Correcting the Accounting Entry:
The firm should reverse the incorrect entry in the purchases account and debit the employee's account for the goods purchased. This will ensure that the accounts reflect the correct transactions.

2. Adjusting Salaries:
The amount owed by the employee can be deducted from their salary in subsequent payment cycles. The firm should communicate with the employee regarding the error and the deduction made from their salary.

3. Strengthening Internal Controls:
The firm should review its internal control system and implement necessary improvements. This may include segregating duties, implementing checks and balances, and ensuring proper documentation for all transactions.

4. Training and Communication:
Proper training should be provided to the employees responsible for recording transactions and processing payroll. Clear communication channels should be established between the relevant departments to avoid similar errors in the future.

Conclusion:
In conclusion, the incorrect recording of the purchase transaction in the purchases account instead of debiting the employee's account was an error that can occur due to various reasons such as lack of documentation, accounting errors, internal control weaknesses, or lack of communication. The firm can rectify the error by correcting the accounting entry, adjusting salaries, strengthening internal controls, and improving training and communication.