The correct answer is: B. making provision for bad and doubtful debts.
The convention of conservatism is the practice of erring on the side of caution when making accounting estimates. This means that companies should record liabilities as soon as they are probable and measurable, even if the amount is uncertain. They should also recognize losses as soon as they are probable, even if the amount is uncertain.
Bad and doubtful debts are debts that are unlikely to be collected. Companies should make a provision for bad and doubtful debts in order to reflect the fact that these debts are not likely to be collected. This provision is a liability that is recorded on the balance sheet.
The other options are not applicable to the convention of conservatism. Option A, providing for discount on creditors, is a practice that is used to account for the time value of money. Option C, creating reserve for financial stability, is a practice that is used to protect a company from unexpected financial losses. Option D, none of these, is the correct answer if the question is asking for the option that is not applicable to the convention of conservatism.