Choose the correct statement(s) below regarding the transfer of financial assets such as receivables: in a transfer of receivables without recourse, the transferee obtains the right to compensation from the transferor for customer accounts that prove to be uncollectible. in a transfer which qualifies as a secured borrowing, the transferor will record a liability for the amount borrowed. under otherwise identical conditions, a transferor will generally pay a higher commission percentage on a receivable sold with recourse versus one sold without recourse.

Powell company began the 2018 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. during 2018, powell experienced the following events: sold merchandise costing $58,000 for $99,500 on account to prentise furniture store. delivered the goods to prentise under terms fob destination. freight costs were $900 cash. received returned goods from prentise. the goods cost powell $4,000 and were sold to prentise for $5,900. granted prentise a $3,000 allowance for damaged goods that prentise agreed to keep. collected partial payment of $81,000 cash from accounts receivable. required record the events in a statements model shown below. prepare an income statement, a balance sheet, and a statement of cash flows. why would prentise agree to keep the damaged goods?