Final answer:
An error that overstates the ending inventory does indeed cause the net income for the period to be overstated because it results in an understatement of the cost of goods sold, thus overstating gross profit and net income.
Step-by-step explanation:
The statement, An error that overstates the ending inventory will also cause net income for the period to be overstated, is true. When the ending inventory is overstated, the cost of goods sold (COGS) is understated because COGS is calculated by adding purchases to the beginning inventory and then subtracting the ending inventory. If COGS is understated, then the gross profit will appear higher, and as a result, the net income for the period will be overstated. This is based on the fundamental accounting equation where Cost of Goods Sold = Beginning Inventory + Purchases - Ending Inventory. An error in the ending inventory has direct implications on the financial statements.