Final answer:
Recording transactions in the journal is the step that must be completed before preparing the adjusted trial balance. Hence the correct answer is option B
Step-by-step explanation:
The correct step that must be completed before preparing the adjusted trial balance is B) Recording transactions in the journal.
Recording transactions in the journal is the first step in the accounting cycle. This involves the systematic recording of all financial transactions in chronological order. After recording transactions in the journal, the next steps include posting adjusting entries to the general ledger, preparing the financial statements, and then preparing the adjusted trial balance.