CLEARING is the process of reporting a trade to ACT for comparison of the details of the transaction between brokers prior to final settlement; the final exchange of securities for cash on delivery. Clearing operations, such as the National Securities Clearing Corporation (NSCC), facilitate the validation, delivery, and settlement of securities transactions. Trades are either reported by the broker to the clearing corporation directly or through a third party, usually another brokerage firm if a broker does not have a direct relationship with a clearing corporation.
INHERENT LIMITATION is whether the potential effectiveness of an entity's internal control is subject to inherent limitations, e.g., human fallibility, collusion, and management override.
LIFO RESERVE is the difference between the ending inventory under LIFO and FIFO (or other method that might be chosen).
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