Step 1: Understanding the Concept
In substrate-level phosphorylation, ATP or GTP is made by direct transfer of a phosphate group from a high-energy substrate, without the electron transport chain.
Step 2: In the cytoplasm
In glycolysis it happens twice: 1,3-bisphosphoglycerate to 3-PGA and phosphoenolpyruvate to pyruvate.
Step 3: In the matrix
In the Krebs cycle it happens when succinyl CoA is converted to succinate in the mitochondrial matrix.
Oxidative phosphorylation, not this process, occurs on the inner mitochondrial membrane.
Final Answer:
Substrate level phosphorylation occurs in the cytoplasm and in the mitochondrial matrix.
\[ \boxed{\text{(D) }\text{in cytoplasm of the cells and matrix of mitochondria.}} \]