Question

1. The right of appropriation arises when a customer owes more than one debt to the bank.

2. The right of appropriation applies only when the payment made is sufficient to clear all debts.

Which of the statements given above is/are correct?

• A. 1 only
• B. 2 only
• C. Both 1 and 2
• D. Neither 1 nor 2

Answer 1

Answer:

A. 1 only

Statement 1 is correct. Statement 2 is incorrect because appropriation arises when the payment is insufficient, not sufficient.