Negative Unliquidated Orders (NULO's) occur when which condition holds?

• A. liquidation > obligation
• B. obligation > liquidation
• C. equal liquidation and obligation
• D. no travel orders exist

Answer: (A)

When funds are set aside for a purchase, that amount is an obligation. As payments are made, those funds are liquidated, reducing the remaining obligation. A negative unliquidated order happens when more has been liquidated than was obligated, so the liquidation amount exceeds the obligation. In formula terms, ULO = obligation − liquidation; if liquidation > obligation, ULO becomes negative, which is the NULO situation. For example, obligating 100 but liquidating 120 yields a negative balance of 20, signaling an over-liquidation relative to the recorded obligation. If obligation were greater than liquidation, you’d still have a remaining unliquidated obligation (not negative); if they are equal, there’s no unliquidated amount. Travel orders aren’t the factor here.