Final answer:
Companies can recognize revenue before a product is completed and delivered, typically using methods such as the percentage of completion for long-term projects or as services are performed over time.
Step-by-step explanation:
The statement that companies can recognize revenue prior to completion and delivery of the product under certain circumstances is true. One common circumstance is when revenue recognition is based on the percentage-of-completion method. This accounting practice is commonly used in long-term contracts such as construction projects, where revenue, expenses, and profit are recognized incrementally as the work progresses, rather than at the end. Another example is when a service is being provided over time and revenue is recognized as the service is performed, even if the entire service is not yet complete.