Final answer:
The statement about U.S. companies needing to prepare financial statements based on GAAP is true, as these principles ensure consistency in financial reporting.
Step-by-step explanation:
The statement that generally, the financial statements of U.S. companies must be prepared based on GAAP (Generally Accepted Accounting Principles) is TRUE.
GAAP is a set of accounting standards and procedures that companies based in the U.S. are required to follow when they compile their financial statements. These principles are designed to ensure consistency, clarity, and comparability of financial information across different entities.