Financial accounting is an ongoing process which begins with recording journal entries and culminates in the drawing up of profit and loss account and balance sheet. It has several stages like journalizing entries and recording them in subsidiary books, posting to ledger accounts, drawing up trial balance and concluding results by compiling a complete set of financial statements. Along the way, many types of accounting errors may occur. These are inadvertent errors that can occur at various phases of accounting and, if gone undetected, can lead to erroneous financial reporting. The timely identification and correction of such errors is imperative for each commercial entity so that both internal and external stakeholders obtain the correct information which they need about the entity.

This article looks at meaning of and differences between two types of clerical errors commonly seen in business entities – errors of omission and errors of commission.

Definitions and meanings

Error of omission

The error of omission is an accounting error of clerical nature wherein a financial transaction is partially or completely omitted to be recorded in the books of accounts. These errors are of two types – complete omission and partial omission.

Complete omission:

A complete error of omission is when the accountant misses to record the financial transaction by way of a journal entry in its entirety. Such errors can result in under-reporting or over-reporting of profit. They may be uncovered when periodic reconciliations (especially third-party reconciliations) are done. For example, Elisha Inc. makes regular material purchases from one of its suppliers. The accountant misplaces an invoice and thus inadvertently misses to record purchases of $10,000 made in the first week of May 2021. When the supplier sends his quarterly account statement for settlement, the error is uncovered and rectified by passing the required purchases journal entry.

Partial omission:

A partial error of omission is when a transaction is recorded by way of a journal entry or subsidiary book but is missed to be posted to the relevant ledger account. Partial error of omission leads to imbalance in the trial balance. Continuing the same example above, if the purchase entry is recorded in the purchase book but is missed to be posted to the credit of the supplier’s ledger account, it will be a partial error of omission. It can be uncovered on third party balance reconciliation or on tallying of trial balance and can be rectified by posting to the affected ledger account.

Errors of commission:

The error of commission is also a clerical accounting error wherein a financial transaction is incorrectly recorded in the books. These errors can include the following types of errors:

  • Entry is recorded in journal/subsidiary book but posted at an incorrect amount to the ledger account or posted to the wrong side of the ledger account
  • Entry is posted to a wrong ledger account
  • Entry is posted twice to the ledger account
  • Entry is recorded but with a wrong amount
  • Incorrect carry forward or brought forward of ledger account balances
  • Arithmetical error in totaling of subsidiary books or balancing of ledger accounts

Errors of commission typically occur due to negligence or carelessness by the accountant.

For example, Elisha Inc. purchases raw materials of $10,000 from its supplier. It correctly records the purchase transaction in the purchase book. However, while posting to the supplier account, an amount of $1,000 (instead of $10,000) is posted to the debit side of the supplier account (instead of to the credit side).

In order to rectify this error, the erroneous debit posting of $1,000 will first be reversed and then a correct posting of $10,000 will be made to the credit side of the supplier account.

Difference between error of omission and error of commission

The six key points of difference between error of omission and error of commission have been detailed below:

1. Meaning

  • Error of omission is when an accounting entry is either completely or partially not recorded in the books of accounts.
  • Error of commission is when an accounting entry is recorded but incorrectly.

2. Recording in book of original entry

  • In case of error of omission, the accounting entry may or may not be recorded in the journal/subsidiary book depending on whether the error is partial or complete.
  • In case of error of commission, an accounting entry is recorded in the journal or subsidiary book, albeit incorrectly.

3. Cause

  • Errors of omission generally occur due to inadvertent mistake of the accountant.
  • Errors of commission occur due to negligence, carelessness or incorrect knowledge on the part of the accountant.

4. Types of errors included

  • Complete omission involves absolute omission i.e., no accounting entry is recorded. In partial omission, accounting entry is initially recorded in journal or subsidiary records but not posted to the general ledger account.
  • Errors of commission includes recording entries at wrong amounts, posting to wrong accounts, posting at wrong amounts or posting at the wrong side and balancing and totaling errors.

5. Impact on trial balance

  • A complete error of omission will not impact the balancing of trial balance but a partial error will.
  • An error of commission may or may not impact the balancing of trial balance depending on the type of error.
    -: Wrong amount recording: no impact as both credit and debit side entries will be the same
    -: Wrong account posting: no impact
    -: Wrong amount posting: will impact
    -: Wrong side posting: will impact
    -: Incorrect totaling or balancing: will impact

6. Rectification

  • Rectifying errors of omission is a one-step process. In case of complete error of omission, rectification is done by recording the required accounting entry. In case of partial error of omission, rectification is done by posting the entry to the required ledger account.
  • Rectifying errors of commission is a bit more complex. They need to be rectified by correcting the incorrect recording; hence, it usually involves reversal of the incorrect posting or entry and then fresh recording of a correct entry or correct posting to the right ledger account.


Both errors of omission and errors of commission are clerical arithmetic errors. In the former, an entry or part of entry is not recorded at all whereas in the latter, entries are recorded but erroneously. Several of these errors can be identified through periodic reconciliations, including third party balance reconciliations, bank reconciliations and inventory reconciliations etc. Errors that impact trial balance can also be uncovered when an imbalance in trial balance is discovered. If not rectified, these accounting errors can have material impact on the profitability and financial position as reported by the books of accounts. Thus, it is important that every account department has a system of checks and balances in place to uncover such errors and rectify them in a timely manner.