Final answer:
The step in the accounting cycle after the preparation of the worksheet and before journalizing and posting the adjusting entries is preparing financial statements.
Therefore, the correct answer is: option b). Preparing financial statements
Step-by-step explanation:
The accounting cycle is a collective process of identifying, analyzing, and recording the accounting events of a company. It is a standard 8-step process that begins when a transaction occurs and ends with its inclusion in the financial statements and the closing of the books.
Financial statements are essential since they provide information about a company's revenue, expenses, profitability, and debt. Preparing financial statements step involves summarizing the financial information from the adjusted trial balance and presenting it in the form of income statements, balance sheets, and cash flow statements.
After preparing the financial statements, the next steps would be to journalize and post closing entries, followed by journalizing and posting the adjusting entries.