After you create a new user account, the main User Accounts window reappears displaying it. Initially, the new account has the same icon as your account and has no password for log in. A password isn't necessary, but if you want the user to have one, here's how to create it.
The next screen appears with a warning that the user will lose stored passwords and other info. If this is a brand new user account, there won't be any information to lose.
The screen from step 2 reappears asking you what you want to change. Let's change the user icon this time.