Definition

Error of omission

      An error of omission is one where a transaction has not been recorded in the books of account either wholly or partially. In the former case, it will not be detected by the trial balance, though it may be apparent in some cases, e.g., the rent for the last month of the year might not have been recorded in the books of account as it had not been paid to the landlord. In case the transaction has been partially recorded, e.g., if one aspect of the purchases or sales had been entered in the books, it will affect the trial balance and ultimately the profit and loss account.

Share it:  Cite

More from this Section

  • Cash payments journal
    Cash payments (cash disbursements) journal refers to a special journal where companies ...
  • Operating expenses
    Operating expenses is a category expenses of a merchandising company that are expenses ...
  • Bank reconciliation
    Bank reconciliation is the process of comparing the bank’s balance of an account with ...
  • Factor
    A factor is a finance company or bank that buys receivables from businesses and then collects ...
  • Retained earnings statement
    The retained earnings statement is a financial statement that shows the changes in retained ...