De`fal*ca"tion (?), n. [LL. defalcatio: cf. F. d'efalcation.]
A lopping off; a diminution; abatement; deficit. Specifically: Reduction of a claim by deducting a counterclaim; set-off.
That which is lopped off, diminished, or abated.
An abstraction of money, etc., by an officer or agent having it in trust; an embezzlement.
© Webster 1913.