Physical inventory counts: are not necessary under the perpetual system. are not necessary under the cost-to benefit constraint. are necessary to determine differences between actual inventory available and the inventory account balance. must be taken at least once a month. require the use of hand-held portable computers.

Physical inventory counts are necessary to determine differences between actual inventory available and the inventory account balance. Inventory counts help a business to keep track of the inventory. Physical inventory involves physical counting of the entire inventory, this ensures that the inventory on the organizations's or business financial book matches the amount in the inventory on the sales floor, stockroom or warehouse.