Accounting for Contributions in Defined Contribution Plans

A company XYZ Corp. sponsors a defined contribution retirement plan for its employees. Under this plan, the company contributes a fixed percentage of each employee's salary to individual accounts, and employees also have the option to contribute a portion of their salary. At the end of the fiscal year, the company reviews its contributions and how they are reported in the financial statements. It becomes essential for the company's management to ensure compliance with the accounting standards regarding the proper recognition and reporting of these contributions.

Considering the implications of defined contribution plans, which of the following statements accurately reflects how XYZ Corp. should account for its contributions to the defined contribution plan in its financial statements?