While it depends a little bit on how he asks, usually I would go for the test. What can I loose, when I test. Failing an unprepared test is nothing one should be blamed for. And yes, I would blame myself for all the silly mistakes - which would happen nevertheless. I would loose some 20 EUR for the test, maybe a little bit more for yudansha grades.
If I reject, i would send a signal of lacking confidence in my sensei, which could harm much more.
So only, if he would tell me something like "you have the minimum requirements, so you could test next week, if you want", I might ask for another month with better preparation.
"Might" is the important word. I always overestimate my abilities, so probably I would accept to test anyhow
just my humble 2 cents