The correct answer is option 'D', which states that provisions for liability are not examples of provisions. Let's understand why this is the correct answer.

Provisions are an important accounting concept that allows businesses to account for anticipated expenses or losses that are likely to occur in the future. They are recorded on the balance sheet as liabilities, representing potential future obligations of the company.

Here is a breakdown of the provided examples of provisions and why they are considered as provisions:

a) Provision for depreciation: This is a common provision that businesses make to account for the wear and tear, obsolescence, or decrease in value of their fixed assets over time. Depreciation is an expense that is recorded over the useful life of the asset, and the provision for depreciation ensures that the cost of the asset is spread out over its useful life.

b) Provision for taxation: Businesses are required to pay taxes on their income or profits. The provision for taxation is made to estimate and account for the amount of tax liability that the company is expected to pay in the future. This provision ensures that the company sets aside enough funds to meet its tax obligations when they become due.

c) Provision for bad and doubtful debts: This provision is made by businesses to account for potential losses due to non-payment or default by customers or debtors. It is a precautionary measure to anticipate and provide for the possibility that some customers may not be able to pay their debts. By creating a provision for bad and doubtful debts, the company reduces the impact of such losses on its financial statements.

d) Provision for liability: This statement is incorrect because provisions for liability are indeed examples of provisions. Provisions for liability are made to account for potential future obligations or expenses that are likely to arise from existing legal or constructive obligations. Examples of provisions for liability include provisions for warranty claims, provisions for legal settlements, or provisions for restructuring costs. These provisions are recorded on the balance sheet as liabilities, representing the company's estimated future obligations.

In conclusion, provisions are an important accounting concept that allows businesses to account for anticipated expenses or losses. The examples provided (depreciation, taxation, bad and doubtful debts) are all examples of provisions, while provision for liability is also an example of a provision. Therefore, the correct answer should not be option 'D' but rather all of the above.

Option D is correct because Provisions are made out of profit while they are treated as charge in some cases but they are created from the profits of the business, all other three options are provisions because they are not compulsory if there is not profit but the last option is for the liability and as we know liabilities are compulsory to be paid either profit is generated or not.