What is an omission error?

An omission error refers specifically to the failure to record a transaction or balance in the accounting records. In this case, leaving out one ledger from the entries accurately describes this type of error, as it involves missing an entire component of the financial record which can lead to inaccurate financial statements. Omission errors can significantly affect the reliability of financial information, as they may cause an incomplete or misleading view of the financial position.

The other options describe different kinds of errors in financial accounting. For example, recording the wrong amount for an expense represents a misstatement rather than an omission, where the correct entry is made but with incorrect information. Making an incorrect journal entry and failing to transfer amounts during closing also illustrate specific mistakes but do not capture the essence of omitting an entire entry or ledger. Omissions are particularly critical because they may not be easily identified during the review process, potentially leading to more substantial discrepancies in reported financial performance.