Question 40 Under a periodic system, a cost flow assumption is applied only when a physical inventory account is taken. True O False Question 39 Which of the following concerning lower-of-cost-or-net realizable value is true? Lower-of-cost-or-NRV is an example of the revenue recognition principle. Inventory should be recorded at its fair value. If an inventory's market value exceeds its cost, a gain should be recorded on the income statement. O Inventores sales value can be independent of replacement cost. Question 38 Costs that are incurred on an asset and provide future value are recorded as an expense. O True O False Question 37 2 pts On January 2, Year One, Leather Company purchased a wallet costing $5. On January 5, it purchased an identical wallet costing $5.25. The company sold one of the wallets on January 10 for $8.95. Under FIFO, the company would assume that the wallet purchased on January 2 was sold first. O True False Question 36 A perpetual inventory system provides an ongoing record of all inventory items present, both in total and individually. O True False