Which statement is true about the gross profit method of inventory valuation?

It eliminates the need for physical inventories.

When calculated on selling price, it will always be more than the related percentage based on cost.

It may be used to estimate inventories for interim statements.

It may be used to estimate inventories for annual statements.

Which of the following statements is false regarding an assumption of inventory cost flow?

The cost flow assumption need not correspond to the actual physical flow of goods.

The LIFO assumption uses the earliest acquired prices to cost the items on hand at the end of an accounting period.

The assumption selected may be changed each accounting period.

The FIFO assumption uses the earliest acquired prices to cost the items sold during a period.