Hi and welcome to the communities and almost to the perfect world 
would like to clone the Windows 2008 R2 server with a different name.
Of course you can. If you have a VC, it would be quite the easy walk in the park, if you dont, still its an easy method.
This server is running SQL Server 2008 R2 also and has our accounting databases running on it.
I would suggest that once you clone the VM, try to keep the VM in a separate vswitch with no uplink so that the existing db reference will not be affected.
Not sure if this is the best way to do this. I might be better off creating a new server, installing SQL and restoring the databases to that newly created instance.
This is temporary so that I can test the upgrade and validate the data. Once satisfied, we will upgrade the production VM.
Another easy method would be, "If you can take a small downtime",
1. Take the snapshot of the Virtual machine and name as "Before applying upgrade"
2. Apply the upgrade,. Test it out, wear it our. If you are satisfied,.
3. Start using the snapshot as base going forth.
4. If after applying upgrade, if you find anything suspectful, always revert to the snapshot before the upgrade.