6 If a firm experienced an increase in inventory by $500,000, then: $500,000 should be subtracted to calculate CFO. $500,000 should be added to calculate CFO. $500,000 should be added to calculate CFL. $500,000 should be subtracted to calculate CFI. Matching principle is a key principle of accrual-based accounting system. Matching principle is the notion that: D Revenues and expenses must be recognized when cash transactions are made. Revenues and expenses must be recorded at the end of each month. Revenues and expenses incurred to generate those revenues must be recognized together Revenues must be recognized when products or services are delivered and expenses be incurred when suppliers deliver row materials. 8 If the economy experiences continuous inflation, then: Using LIFO brings net income higher than LIFO. Using FIFO brings net income higher than LIFO. Net income differs between LIFO and FIFO but cannot be determined which system brings higher net income. Net Income is not different between LIFO and FIFO. MacBook Pro