Clean-up work for your accounting records sometimes involves clearing out your expenses that have accumulated over a period of greater than one year that are still lingering in your expense accounts.  This causes your expense accounts to be inaccurate, leading to inaccurate financial statements. What do you do in this situation? A simple solution to clear these expenses is to use an account in your other expense section of your income statement named 'prior period expense'. For each of your expenses you want to clear, you will debit prior period expense and credit the expense for the expense amount you wish to clear. Be sure to enter a description in the memo section like "to clear Yr 20xx advertising expense". This gets rid of your expense on the income statement and leaves a total in the prior period expense for all of the adjustments (clearing of expense accounts) for that year.

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