On January $1,$ Year $2,$ Colgate Corporation decided to switch from the direct method to the indirect method of preparing the statement of cash flows. Assuming a positive net income figure but a decrease in the cash balance, what can be said about the change in method of preparing the statement?

Multiple Choice

The direct method will yield a larger amount for cash flows from operating activities.

The only difference will be in the cash flows from financing activities section.

$$ The indirect method will yield a larger amount for cash flows from operating activities.