Banking · Appropriation of Payments
Under the Rule in Clayton's Case (1816), which is typically invoked in the context of running accounts like a Current Account, subsequent credits are applied to discharge the earliest existing debts. This rule determines the appropriation of payments, especially when dealing with:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A loan account with a fixed repayment schedule.
- 2A partnership account following a change in partnership composition or death of a partner.✓
- 3A minor's account converted to a major's account.
- 4A closed Fixed Deposit account.
Correct answer
A partnership account following a change in partnership composition or death of a partner.
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