Consider the following statements relating to how we might account for certain transactions or events. What accounting assumption or principle underlies each?
1. 'Inventory is recorded at cost unless the net realisable value of inventory is below cost. In that case, inventory is written down to the net realisable value.'
2. 'Accounting financial statements are primarily based on historical costs. They should, however, be primarily about the contemporary cash value of a company's net assets.'
3. 'At the end of each period, a company has to calculate any salaries that have accrued, and recognise an expense and a liability for that amount.'
4. 'If a company changes its depreciation policy, it needs to disclose (in the notes to the financial statements) the nature of the change, and its financial effects.'
5. 'Many businesses do not record "freight in" as part of the acquisition cost of inventory, but any freight charges of the period, which are normally small amounts, are expensed in the gross profit section of the income statement.'