One way to understate current earnings would be which of the following? None of $1,2,$ or $3.1.$ Understate reserves for bad debts, loan losses and asset impairments. $3.$ Expense costs that should be capitalized. $2.$ Abuse the principle of materiality by omitting losses from small transactions. Both $1$ and $2\mathrm{.}3$ pts$3$ ptsQuestion $4$Which of the following accounts need to be subtracted from the net income to obtain cash flow from operations using the indirect method?$10$ All of $1,2,$ and $3.$ Both $1$ and $3.2.$ Loss on sales of assets. $3.$ Decrease in accounts receivable. $1.$ Increase in investment accounts from equity income.