Because the corporation records the depreciation charge that accumulates in the contra-

asset account over time, we credit the accumulated depreciation account. However, the

account for cumulative depreciation can be debited or completely deleted in certain

circumstances. An item that has been in operation for five years and has accumulated

$100,000 of depreciation is an example.

The account would need to be zeroed out if the company sold the asset beyond the 5-year

period because the asset is no longer relevant to the company. Because the asset account

would be credited, the depreciation account would be debited, and the gain or loss would

depend on the asset's value and the amount received.