Please help me if item a$)$ is the correct one or item c$?$ Thank you.

Which statement best describes the treatment of hobby expenses?

a$.$ Hobby expenses are allowed to be deducted in full from hobby income, but cannot create a loss.

b$.$ Allowed as an adjustment to income in part II of schedule $1($form $1040)$ up to the amount of hobby income.

c$.$ Only cost of goods sold is allowed to be deducted from hobby gross recepts before reporting the hobby income.

d$.$ Only cost of goods sold is allowed as an adjustment to income in part II of schedule $1($form $1040)$ up to the amount of hobby income.