Final answer:
A physical inventory count is still necessary in a perpetual inventory system to ensure the accuracy of inventory records, due to potential discrepancies such as theft or recording errors.
Step-by-step explanation:
False. Despite the use of a perpetual inventory system, which continuously tracks inventory transactions, it is still essential for companies to conduct a physical inventory count periodically. This physical count is necessary to verify the accuracy of the inventory records, as discrepancies can occur due to factors such as theft, loss, damage, or recording errors. Therefore, the physical count serves as an audit to ensure the reported inventory levels in the financial statements correspond to the actual physical inventory on hand. A perpetual inventory system keeps a real-time record of inventory levels, usually with the help of technology and software. However, physical inventory counts are essential to verify the accuracy of the recorded inventory and identify any discrepancies or shrinkage.