Which of the following observations is true about dilute solution of acetic acid?

Acetic acid ($CH_3COOH$) is a carboxylic acid. Being acidic in nature, it turns blue litmus paper red. Dilute acetic acid has a characteristic smell of vinegar (in fact, vinegar is a $5-8\%$ solution of acetic acid in water). Therefore, option D is correct.

• Option A is incorrect because acids turn blue litmus red, not red litmus blue.
• Option B is incorrect because acetic acid smells like vinegar, not onion.
• Option C is incorrect because it does not smell like orange and does not turn red litmus blue.