Which term denotes a formal evaluation performed once a year to assess performance, compliance, or other key metrics within a business, contract, or agreement?

• A. arrears
• B. budget billing
• C. annual review
• D. true-up adjustment

Answer: (C)

An annual review is a formal, yearly assessment of how a business, contract, or agreement is performing. It involves checking performance against goals, ensuring terms and policies are followed, and evaluating key metrics so leadership can decide on renewals, improvements, or changes in scope. This kind of evaluation is designed to occur once each year and to document outcomes in a formal way. Arrears refers to overdue payments, budget billing is a predictable plan to smooth bills, and a true-up adjustment is a reconciliation of estimated versus actual charges—often at the end of a period—rather than a standing yearly performance review.