What Does the Term "Red Ink" Mean?
"Red ink" is business jargon describing a financial loss, withdrawal, or debt. When accountants made physical entries into a general ledger, red ink was used to show a negative number, and black ink was used to show that a number was positive or profitable.
Key Takeaways
- "Red ink" is financial jargon describing the coloring of accounting entries that denote losses or negative outcomes.
- When accountants made physical entries into a paper general ledger, red ink was used to show a negative number, and black ink to show that a number was positive or profitable.
- That custom paved the way for the term "in the red," which can be applied to any company or individual with a negative balance.
History of the Term "Red Ink"
The negative connotations of red in finance are generally attributed to the old custom of accountants opting to use the color to denote losses. When company books were maintained by hand, red and black ink were convenient methods to call attention to the entries subtracting or adding value. Red, it just so happens, signified a subtraction or a loss.
That habit has lived on. Today, most financial and operational ledgers are maintained electronically, using parentheses around losses or negative entries. However, it is not uncommon for some programs to use red and black coloring to highlight losses and gains.
Important
A red entry doesn't always mean a loss was taken. It was also used to signify a withdrawal or expense in a ledger or journal.
Why the Color Red Was Used
In many cultures, colors can function as a symbol of feelings and emotions. Some evoke calm and tranquillity, while others are more loud and powerful.
Red falls under the latter category and is said to signify everything from energy, passion, and sexuality to aggression, danger, violence, and war. Some of these associations can be described as positive and others negative, yet in financial circles, any mention or use of this particular color almost always means something bad.
Red ink is synonymous with the business expressions "bleeding red ink" or "in the red." When red is used with numbers, it generally indicates that a company, government, or other entity is spending money or using more than it brings in. An individual with more liabilities than assets who cannot pay off debts can also be in the red.
Red is often used in business to indicate that something unwanted is happening, too. For example, regulations governing companies are regularly referred to negatively as red tape. Investors may also refer to a falling share price or the stock market as being in the red.
Special Considerations
A company with red ink featured heavily in its accounts may not necessarily be doomed. A lack of profitability might be a temporary issue linked to necessary expenditure on research, new technology, or to pay off debt.
These expenses make its financial statements look ugly. However, they can strengthen the company and its ability to make money over the longer term. The line may be drawn when a company is consistently in the red. Persistent losses could lead it to lose shareholders, fail to attract new ones, struggle to secure any financing, finally ending in bankruptcy.
Why Do We Say "In the Red"?
It is commonly believed that "in the red" stems from accountants using red ink in physical accounting ledgers and journals to signify withdrawals, negative entries, or debts.
What's the Meaning of "In the Black"?
Businesses, governments, and people commonly use the phrase "in the black" to refer to a positive fund balance in their accounts.
What Does It Mean to "Fall Into the Red"?
The phrase "fall into the red" is generally used to refer to moving from a positive account balance to a negative account balance or into debt.
The Bottom Line
In financial terms, red ink means a debt or negative account balance. It is a term used by people, governments, and businesses. It is generally thought to derive from entries in paper accounting journals and ledgers where black and red ink were used to signify positive and negative account activity.
FAQs
In some ancient civilizations, such as the Aztecs, red tattoos were used to mark warriors and distinguished members of society. In other cultures, red ink was believed to possess protective and auspicious qualities, warding off evil spirits and bringing good fortune.
What does it mean when you use red ink? ›
"Red ink" is financial jargon describing the coloring of accounting entries that denote losses or negative outcomes. When accountants made physical entries into a paper general ledger, red ink was used to show a negative number, and black ink to show that a number was positive or profitable.
What is the concept of red ink? ›
Meaning of "Red Ink"
Red ink is a jargon used for defining financial loss. The red ink is used to display a negative amount as accountants make actual entries into a financial ledger. Black ink is used to mean a number is either positive or profitable.
What does the red pen mean in writing? ›
It's the colour of the pen that's commonly used to highlight spelling mistakes and low marks in school; it's the colour a fail mark comes up in; it's a colour that generally means stop- stay where you are - don't progress or go forward.
What was the first ink in history? ›
It is composed of a pigment or dye dissolved or dispersed in a liquid called the vehicle. Writing inks date from about 2500 bc and were used in ancient Egypt and China. They consisted of lampblack ground with a solution of glue or gums, molded into sticks, and allowed to dry.
Who created red ink? ›
The researchers write that the Egyptians created red inks with iron-based compounds—most likely ocher or other natural earth pigments.
How do you use red ink in a sentence? ›
Examples of red ink
He turned the leaves, looking with pleasure at the fine initial letters in red ink. Everybody wanted to mark his possession upon it with red ink, and these red ink lines invariably interfered with one another.
Why is red ink not legal? ›
Signing a check or endorsing the back of a check in red ink could trigger trouble by delaying payment of the check. In extreme instances of fraud prevention, it could even void the check's validity. “Red ink has been considered a warning color since the Cold War era,” says Angleton.
Why is red ink red? ›
Red pigments are made from cinnabar, with is a mercury-based metal. Tattoo inks also include carriers (liquid) that help them adhere to the skin. Red tattoo ink usually uses glycerin, water, isopropyl alcohol, and acrylic resin as a carrier.
When was red ink first used? ›
Ink was used in Ancient Egypt for writing and drawing on papyrus from at least the 26th century BC. Egyptian red and black inks included iron and ocher as a pigment, in addition to phosphate, sulfate, chloride, and carboxylate ions; meanwhile, lead was used as a drier.
In a nutshell, "bad luck" seems to be all there is to it. It has long been said in Japan that there is not a very good image of red color itself, and it seems that the red color spread as a bad omen because it reminds us of red paper during the war and blood = death.
How does red ink age? ›
However, it is common for red tones to lose their vibrancy and take on a dull, flat appearance. In addition, red ink tends to fade to pink. However, red tattoos can look great for years when applied deep in the skin and in heavily saturated layers!
Who writes with red ink? ›
However, in the traditional Korean culture, the names of the deceased are written in red-coloured ink. Hence, people do not use this pen to write the names of the living.
What does red ink mean spiritually? ›
Red. Red symbolizes energy, passion, strength, courage, physical activity, creativity, warmth, and security. It is also associated with aggression. In healing, use red to bring warmth and burn out disease.
Should I write in a red pen? ›
The psychological impact of red
For example, one study by Rutchick et al says that a red pen will provide more corrections but fewer marks than those with neutral coloured pens. “People using red pens to correct essays marked more errors and awarded lower grades than people using blue pens,” noted the report summary.
Why don t teachers use red ink? ›
“That is, writing in the color red is loaded with emotion” and “may not be a tactic that teachers should use to convey constructive, critical comments.” And it's not just a matter of perception. A 2010 study showed that using red ink can actually make someone a harsher critic.
What are some facts about red ink tattoos? ›
Symbolic meaning: Red is often associated with emotions such as passion, love, and strength. Having a red outline can enhance the symbolism and convey a specific message or personal significance within your tattoo. Cons: Allergic reactions: Although rare, some individuals may develop an allergic reaction to red ink.
What color was the first ink? ›
Ink is typically colored, but the very first inks used charcoal or soot from the fire as the main pigment, hence why most of the early written works found were written in black ink.
