Why is matching gain and sacrifice necessary in goodwill adjustment?

Correct answer: Because goodwill burden falls only on actual gainers

The direct answer is A. Goodwill adjustment is compensation for the change in profit-sharing rights. To calculate it fairly, compare each partner’s old share with the new share. A partner whose share increases is a gainer and receives an extra profit benefit; a partner whose share decreases is a sacrificer and gives up profit. The gainer must bear the goodwill burden in proportion to the actual gain, so the gain and sacrifice must be identified and matched. Option A is correct because the burden falls on actual gainers. Option B is wrong because partners do not automatically pay equally; payment depends on their gains. Option C is wrong because goodwill is an intangible business value and need not always be cash; it may be adjusted through capital or current accounts. Option D is wrong because the old ratio is essential for finding the old share and therefore the gain or sacrifice. The reasoning chain is: old ratio gives old share; new ratio gives new share; comparison gives gain or sacrifice; goodwill is charged to gainers and credited to sacrificers. Exam cue: never use the new ratio alone.