tl;dr: you should use a .gcloudignore file, not skip_files in app.yaml.
While the prior two answers make use of skip_files in the app.yaml file. There is now a .gcloudignore that is created when using gcloud deploy or upload commands. The default will depend on the detected language that you are using but here is automatically created .gcloudignore that I found in my Python project:
# This file specifies files that are *not* uploaded to Google Cloud Platform 
# using gcloud. It follows the same syntax as .gitignore, with the addition of
# "#!include" directives (which insert the entries of the given .gitignore-style
# file at that point).
#
# For more information, run:
#   $ gcloud topic gcloudignore
#
.gcloudignore
# If you would like to upload your .git directory, .gitignore file or files
# from your .gitignore file, remove the corresponding line
# below: 
.git 
.gitignore
# Python pycache:
__pycache__/
Note: These commands will not work when both skip_files is defined and .gcloudignore is present. This is not mentioned in the skip_filesdefinition of theapp.yaml` reference.
It seems better to have a globally recognized standard across gcloud commands and makes more sense to adopt the .gcloudignore versus using the skip_files which is only relevant without App Engine. Additionally, it works pretty much like a .gitignore file which the reference mentions:
The syntax of .gcloudignore borrows heavily from that of .gitignore;
  see https://git-scm.com/docs/gitignore or man gitignore for a full
  reference.
https://cloud.google.com/sdk/gcloud/reference/topic/gcloudignore