Rex Trulove
When we say that a business or household is “in the black”, we are saying that they are making money. If they are losing money, they are said to be operating “in the red”. These associated phrases have been around for a long time and the origin of the phrases are really quite simple to understand.
As an example of usage, if a sports team has made some bad deals and is losing more money than they are making, they are said to be operating in the red. That is a bad thing.
The phrases come from the ledgers that accountants used long before the electronic age. In the ledger, assuming that it was honest, the amount of money that was coming in and the amount being paid out for expenses and operating costs were carefully written down. Every penny had to be accounted for and each cent was either an income or a payment. At the end of any given period of time, it could then be figured whether the business or household had the funds to make a large purchase or one that wasn’t absolutely necessary. In other words, the accountant could tell whether the business or household was making money or losing money.
Though the records could be tremendously accurate, math isn’t the forte of everyone. Someone who wasn’t good at math might struggle when trying to figure out if there were funds or not. To make it substantially easier of non-accountant people who lacked a good grasp of basic math, accountants started writing negative numbers, such as expenses and expenditures, in red ink. Positive numbers, or income, was written in black ink. Thus, a person could open the ledger and tell at a glance whether there were excess funds or not, just from the color of the ink.
If the grand total was written in black, the business or household had funds. If it was written in red, money was owed and there were no funds. It is from this that we get ‘in the black’ and ‘in the red’.
