The preparation of financial statements and closing the books is the ______ step of the accounting cycle.

The preparation of financial statements and closing the books represents the last step of the accounting cycle. This stage is crucial because it involves summarizing all financial transactions that have occurred over a specific period into financial statements, such as the income statement, balance sheet, and cash flow statement. Once these statements are prepared, the closing process involves clearing temporary accounts (like revenues and expenses) to begin the new accounting period with a clean slate.

By marking the completion of the accounting cycle, this step provides stakeholders with a comprehensive view of the business's financial health over the period, essential for decision-making, planning, and reporting purposes. Thus, understanding that this step is last highlights the cyclical nature of accounting and the importance of maintaining systematic records to ensure accuracy and compliance in financial reporting.