Final answer:
The correct statement is that transitional cells originate from the upper urethra, ureters, bladder, or renal pelvis. Transitional epithelium changes shape based on the bladder's fullness and is specific to the urinary system.
Step-by-step explanation:
The correct statement regarding epithelial cells in the urinary system is B. Transitional cells originate from the upper urethra, ureters, bladder, or renal pelvis. Transitional epithelium, also known as uroepithelium, is found only in parts of the urinary system such as the ureters and urinary bladder.
These cells can change their shape and become stretched out and less stratified when the bladder is full, or appear thicker and more multi-layered when it is empty. In contrast to the other options provided, cuboidal cells, not caudate cells, line the upper urethra and cells from the proximal renal tubule are not usually round but more tubular or cuboidal. Lastly, squamous epithelium does not line the wall of the urinary bladder; this area is lined by transitional epithelium.