What Exactly Is an Error of Omission? Getting to Know This Common Accounting Mistake
Read on for an overview of accounting errors, explanations of partial and complete errors of omission, and helpful examples so you can avoid these mistakes and keep your books in order. What is an accounting error? An accounting error is any type of mistake that affects accounting entries. You should watch out for errors of: Original entry: The wrong amount is posted in an accountDuplication: The entry is debited or credited twiceEntry reversal: The debit is entered as a credit and vice versaCommission: The debits or credits are entered in the correct account but the wrong subsidiary ledgerOmission: The transaction occurs but an entry is only partially made or is omitted entirely Generally, these errors happen because of a disorganized workspace, a lack of internal controls, or an overworked bookkeeper. What are errors of omission? There are two types of omission errors, a partial error, and a complete error. What is a partial error of omission? A partial error of omission happens when only one part of the transaction is recorded, either debit or credit, but not both. What is a complete error of omission? A complete error of omission happens when a transaction isn't recorded at all. For errors of complete omission, the correcting entry depends on when you caught the error.