Which of the following options act like a "Balancing item" in the Balance of Payment account?

Errors and omissions

The correct answer is option 2: Errors and omission

All the transactions in the BOP account follow double entry rule of debit and credit. The BOP accounting must always be balanced, that is, total of debits must be equal to total amount of credits.

In the Balance of Payments (BoP) account, the "Balancing item" is used to account for discrepancies and ensure that the accounts balance. This is typically referred to as Errors and Omissions.

Note: Accommodating transactions like official reserve changes help balance the BoP accounts when there's a deficit or surplus. However, "Errors and omissions" is also called a balancing item, but in a statistical sense—it adjusts for discrepancies due to data gaps or recording errors. So both terms help achieve balance, but in different contexts.