The final step in the accounting cycle is the finalizing of all accounts. This includes closing all revenue, expense, and dividend accounts to equity accounts, such as retained earnings, in order to prepare them for the next accounting period. After this has occurred, a trial balance can be created which shows the beginning balances of all accounts in the new period. This process ensures that all financial information is accurate and up-to-date during the recording period. Additionally, the preparation of financial statements allows business owners and investors to have an understanding of the overall financial health of the organization.