What does the accounting term""in the red""mean?
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The Curious Bag
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The term "in the red" means a company is in debt and owes money to the bank or its creditors. The phrase has been used to describe a business's financial problems since the 1920s.
Definition
Any business venture is considered "in the red" when its costs exceed its revenue in a fiscal year.
Origin
Traditionally, accountants have used red ink to record negative numbers such as debt or loss on spreadsheets.
In the Black
Conversely, positive entries are recorded in black ink. When a company turns a profit, it is "in the black."
First Use
The term "in the red" first appeared in print in the 1926 book "Wise-Crack Dictionary" by Bruce Grant and George H. Maines.
Operating in the Red
Sometimes the phrase refers to a business that continues to operate without making a profit. Most businesses can only sustain operations in the red for a limited time before reorganization or bankruptcy.
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