Do you need an apple ID to set up an Iphone?

I'm getting my 15year old daughter an IPhone 5s for Christmas. She had an Iphone 4, but forgot her Apple ID and password and no longer can access the phone! We tried everything.Going into the Itunes, the Apple webpage, but nothing worked.Anyway, do you need the Apple ID and password, or can you bypass it>id rather not take a chance.

Iphone 5s's are old… I'm 13 and I have an iphone 6

You can just create a new one.

You don't need an Apple ID to use the phone.
However, if she wants to download app and/or take advantage of the services that Apple offers, she needs an Apple ID. Without one, she can't download apps, nor can she use iMessage, FaceTime, iCloud, and so on.

It's not mandatory, but it limits what she can do on her phone.

If I understood your first sentence correctly, what you are seeing is iCloud lock. ICloud lock is a system to prevent people from stealing iPhones and using them. There's absolutely no way to bypass a security system. Otherwise, there's no point of a security system if you can easily bypass it. You can however, try to recover the account. This requires her to know the answers to her security questions and/or access to the recovery e-mail she used to create her Apple ID. If she can't remember any of this information, then there's no way to recover that account.

No you don't. You can skip Apple ID sign in and make one later.