Which of the following statements is correct?

Question 11 options:

	If an activity is classified as a trade of business, an net business loss is deductible.
	If an activity is classified as a hobby, none of the hobby expenses can be deducted.
	If an activity is classified as a hobby, some of the hobby expenses may be deductible
	Only answers a. and c. are correct.
	None of the above are correct.

Question 12

John Smith works for MNO Company. He is paid a salary, plus the company provides a pension plan. John works during 2006 and earns $12,000 of pension benefits that will be paid after he retires in 2015. Should MNO Company record pension expense in 2006, or wait until John Smith is paid after he retires in 2015?

A) Record the pension expense in 2006.

B) Record the pension expense in 2015 when John Smith is paid after he retires.