Oregon Construction Contractors (CCB) Practice Test

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What does "Net 30" payment terms indicate?

Payment is due upon receipt
Full payment is due in 30 days
Payment must be made within 15 days
30% deposit is required upfront

The correct answer is: Full payment is due in 30 days

"Net 30" payment terms indicate that full payment for a product or service is expected within 30 days from the date of the invoice. This means that after a business or contractor issues an invoice, the client has a 30-day period to settle the total amount due. This term is commonly used in various industries as a way to establish clear timelines for payment, thus helping to manage cash flow for the service provider. Other payment terminology helps clarify the nature of the payment expectations. For instance, terms indicating payment upon receipt suggest immediate payment, while stipulations like a 15-day period for payment would imply a shorter time frame than what "Net 30" specifies. Similarly, a requirement for a 30% deposit upfront refers to a different stage in the payment process rather than the overall payment timeline defined by "Net 30."