A balancing factor in the AVL tree is used to check whether the tree is balanced or not.
Balance Factor of Node A = Height of right subtree of A - Height of left subtree of A.
The allowed balance factors are {-1,0,1}. Otherwise, the node is unbalanced.
If any node is unbalanced we cannot guarantee O(log n) search time. Therefore, AVL tree uses the concept of Balance Factor.
Hence, Option D is the correct option.