Its Error of Commission and the rectification journal entry is Suspense to Purchase 200

Rectification of Errors in Accounting

Introduction
Accounting errors are common in any type of business. These errors may happen in recording transactions, posting them to the ledger, or preparing financial statements. Rectifying these errors is important to ensure the accuracy and reliability of financial reports.

Error in Purchase Book Posting
In this case, an item of purchase worth ₹250 has been posted from the purchase book to the ledger as ₹450. This error has resulted in an overstatement of the amount of purchase and an understatement of the amount of cash or accounts payable.

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

1. Identify the error by comparing the purchase book with the ledger and finding the discrepancy.
2. Prepare a journal entry to correct the error. In this case, the journal entry will be:
Accounts Payable (or Cash) - ₹200
Purchase - ₹200
3. Post the journal entry to the ledger to update the balances of the affected accounts.
4. Verify that the trial balance is now in balance after the correction has been made.

Importance of Rectification
Rectification of errors is important for the following reasons:

1. To ensure the accuracy and reliability of financial reports
2. To prevent misinterpretation of financial information
3. To comply with accounting standards and regulations
4. To maintain the integrity of the accounting system

Conclusion
Rectification of errors is a crucial process in accounting that helps to ensure the accuracy and reliability of financial reports. It is important to identify and correct errors promptly to prevent any adverse impact on the business. By following the steps outlined above, errors can be rectified efficiently and effectively.