Definition Of

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:

More from this Section

  • Owner’s equity statement
    Owner’s equity statement is a financial statement that summarizes the changes in owner’s equity for a specific period of time. The time period is the same as that covered...
  • Financial accounting
    Financial accounting refers to the field of accounting that provides economic and financial information for investors, creditors, and other external users.
  • Sales budget
    A sales budget is a conservative estimate of the expected volume of sales, primarily for making current purchasing, production, and cash ...
  • Return on common stockholders' equity
    A widely used profitability ratio is return on common stockholders’ equity. It measures profitability from the common stockholders viewpoint
  • Payment date
    On the payment date the company mails dividend checks to the stockholders and records the payment to the dividend.
  • Annuities
    In addition to receiving the face value of a bond at maturity, an investor also receives periodic interest payments over the life of the bonds. These periodic payments...
  • Trade receivables
    Notes receivable and accounts receivable that result from sales transactions are often called trade receivables.