Since depreciation expense accrues over time in the contra-asset account, we credit the

accumulated depreciation account as a result of the accumulation of depreciation

expense. The accumulated depreciation account, on the other hand, may be deducted or

eliminated in certain circumstances. Consider the following scenario: an asset has been in

operation for five years and has accrued depreciation of $100,000 in total over that time.

If the company decides to sell the asset after the 5-year period, the account would need to

be wiped out because the asset is no longer relevant to the business. The result would be a

credit to the asset account, a debit to the accumulated depreciation account, and a gain or

loss based on the fair value of the asset compared to how much money was collected.