The correct options are
A They are a type of fungi.
B They are found on dead and decaying organisms.
Mushrooms are a type of fungi which are found in damp, dark places. They generally grow on dead and decaying organisms. They are heterotrophic in nature and cannot prepare their own food. They derive their nutrition from the dead and decaying organisms on which they grow.
Mushrooms are terrestrial organisms because they live on land.