The final step in the accounting cycle is __________.

The final step in the accounting cycle is preparing a post closing trial balance. This process occurs after the books have been closed, which means that all temporary accounts have been zeroed out and all revenue and expense accounts have been transferred to retained earnings.

The post closing trial balance serves as a verification tool to ensure that total debits equal total credits after the closing entries have been made. It includes only permanent accounts (assets, liabilities, and shareholders' equity) since all temporary accounts have been closed. This step is essential as it confirms the integrity of the double-entry accounting system and ensures that the financial records are ready for the next accounting period.

Understanding this final step emphasizes the importance of accuracy in accounting, as any discrepancies at this point could affect the next cycle's financial statements. It also highlights the cyclical nature of accounting, where all previous steps contribute to producing a reliable post closing trial balance, ensuring the organization’s financial health is appropriately reflected.