Common Management Admission Test (CMAT) Practice Exam

What is a common timeline for payment of undisputed charges after receiving an invoice?

1. Due upon receipt

2. Due after one week

3. Due within 30 days

4. Due at the end of the month

The correct answer is: Due within 30 days

The standard timeline for payment of undisputed charges after receiving an invoice is generally set at 30 days. This practice is widely recognized in business transactions, as it allows the buyer sufficient time to verify the accuracy of the invoice, ensure that the goods or services were delivered as promised, and process the payment through their accounting systems. Payment terms such as "due within 30 days" provide a balanced approach, allowing sellers to manage their cash flow and encouraging buyers to process payment efficiently while maintaining a good relationship between both parties. In many industries, particularly in B2B transactions, it is common to see invoices that specify payment terms of net 30 days, which indicates that the total amount should be paid within a month from the date of the invoice. This timeframe helps maintain professional standards and expectations regarding payment. Other options, such as "due upon receipt" or "due after one week," would typically apply in situations where rapid payment is required or in specific sectors where quicker payment cycles are the norm. "Due at the end of the month" refers to a different accounting practice that aligns payments with monthly financial cycles but is not as universally applicable as the 30-day term. Overall, the 30-day payment term is a widely accepted industry standard that