Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule is true? When the net realizable value of inventory is above the cost of inventory, an adjustment is made to increase inventory to its net realizable value. The LCNRV rule is an application of the cost principle. When the net realizable value of inventory drops below the cost of inventory, an adjustment is made to decrease inventory to its net realizable value and decrease income. If a company uses the LCNRV rule, there is no need to use a cost flow assumption such as first-in, first-out (FIFO) or weighted average cost