Of course. When an Apple product is to be refurbished, one of the most important stages is the testing.
Refurbished Apple products go through a full test. This includes hardware and software tests, and a thorough checking of all components. Most parts, if not all, will pass the checks with flying colors.
If there are any issues found, the parts will go through troubleshooting. When the refurbisher knows what is wrong with the part, they can make an informed decision on how to proceed. Sometimes they will replace the part entirely with a new part.
For example, if an iPhone screen has a crack, it will be replaced with a brand new screen. Other times, the refurbisher will simply fix the part. For example, if there’s a loose wire on a MacBook motherboard, they can easily reconnect the wire.
After the fixes or replacements have been completed, the refurbished product needs to go back through the full product test. Only when a product can pass all functional testing (as a new product would), can it be approved and sold as refurbished.