Sounds like silly nonsense. I went through an accounting program before PCs, before calculators. Everything was handwritten using pencils and printed "accounting paper". No red pens or pencils. The "sign" of a balance or entry is usually obvious from the nature of the account or statement and the label attached to it.

Brackets are usually used instead of minus signs, not instead of red printing. I'll bet the style originated in the handwritten days of bookkeeping so that that sign is easier to spot and less likely missed. As in written Spanish, where a sentence that's a question is punctuated with two question marks - one at the beginning of the sentence and one at the end.

In the modern world of accounting and bookkeeping, with spreadsheets and computerized accounting records, analyses and statements, negative numbers are rarely if ever shown in red.

PS-

"Red ink" is a colloquial phrase anyway, not a technical one. FYI, to show you how the premise is silly, on a trial balance (a listing of all balances in a general ledger), a net loss is positive (a debit balance) and income is negative (a credit balance).

"I believe it. It's a credible source."

I didn't make that part up.

Do you have a source for the history of using brackets to denote losses?

Thanks.

Hay

Hay -- what's your "credible source" for "the reason we currently use < and > to indicate losses and negative numbers in accounting is because an accountant was color blind and couldn't distinguish between red ink and black ink."

A very professional accountant who had first hand knowledge of it.

Long time ago.

Hay

That's a new term for me, what's a "professional accountant"

Snidely,

C'mon guy, we see "amateur accountants" on these forums every day.

I honestly have no idea, but it sounds far too ridiculous to be true. I asked a colleague who is an accounting history buff and she has never heard it, and also found it far too coincidental to be true.

I assume that red is simply the preferred color of warning and a very appropriate but intended fit for times when expenses exceed revenues.

"what's a "professional accountant""

Actually it's a "very professional accountant".

I guess an amateur accountant would be me doing my taxes.

Professional is someone I pay to do my taxes.

And very is someone I pay who actually does it right?

I don't know, but the accountant did have two very big houses so he must be doing something right.

I can see I have a room full of doubters here.

If the tale is true, and I believe it, it would have happened in this man's working lifetime. Another question for you that might help me: When did the custom of using < and > for losses begin? Is there evidence that you know of that this practice was going on, say, in the early first half of the last century?

Or, just in general, when and how did < and > come about?

Thanks.

Hay

If the tale is true, and I believe it, it would have happened in this man's working lifetime.

Since we know the saying was popular enough to be printed in 1926 (in Maine & Grant's "Wise-Crack Dictionary), and we can assume that accountants don't start at birth, we can guess that your friend is really really old or that the tale is false.

"Since we know the saying was popular enough to be printed in 1926"

I really don't understand what you mean by "the saying", but, if, indeed, the < and > were used before 1926, then I'll concede that I've been misinformed.

I'll go looking after a while, but, do you have a reference on the internet to what you're saying?

Can you document the origins of < and >?

Thanks.

Hay

"I'll go...."

Me too.

I'm doing other things at the same time, but after trying various combinations of "Maine & Grant's WiseCrack Dictionary" and "accounting" or "accountant", I finally hit with"Maine & Grant's WiseCrack Dictionary in the red"

The phrase "in the red" to indicate a loss is mentioned in that dictionary in 1926. Is that the "saying" you're talking about?

If it is, that doesn't seem to contradict what I'm saying at all, does it?

Still, nothing about < and >? Right?

Hay

From the first link of my search above.

"In the Red

Etymology

From the standard accounting practice of using red ink to denote negative values, especially a net loss. The first known written use of the phrase is from the "Wise-crack dictionary" (1926) by George H. Maines and Bruce Grant.

If anything, this bolsters my statements, if, indeed, in 1926, it was standard practice to use red ink....

Hay

Sorry I misread what you were saying.

I am pretty sure that red ink came after parenthesis and I can't see why parenthesis would have been a replacement for red ink anyway since they are not interchangeable. Red ink originally noted a warning in an account while parenthesis have different meanings, none of them are warnings. For example, on a balance sheet Accumulated Depreciation when noted separately will use parenthesis but not as a warning. Prior to Excel giving you the options of making all negtives red, only certain accounts were coded red.

I can't tell you when we started using parenthesis in accounting but I can tell you that I asked a colleague who has been a professor for 50 years and an accountant for over 60 and she says they used parentheses when she was in school.

If I had to guess it would be with the origin of the comparative report format financial statements that necessitated a one column approach. While I can tell you those have been around for at least 80 years in the U.S., I have no idea when they started.

" I asked a colleague who has been a professor for 50 years and an accountant for over 60 and she says they did it that way when she was in school"

I graduated university and started my public accounting career a bit over 40 years ago, both in California, and never saw red used as other than for tickmarks or footnote keys in hand-prepared workpapers and schedules.

Think copy machines, which came into common use in the mid-60's. B&W Xerox machines. And red ink copies as black. Symbols eliminate any ambiguity. Way back when in the days when Bob Cratchit wrote out Scrooge's accounts, he didn't have a bottle of red ink and a separate quill at the ready, either.

Snidely I was referring to parenthesis, not red ink. So far as I know red ink has never widely been used. Again, that is why I find it hard to believe that something used as commonly as parenthesis only came about to replace something so rarely used as red ink.

Your comment said "red ink noted a warning in an account", then "certain accounts were coded red" and what was next was your quote of your elderly colleague saying that that had been done for 60 years or more.

I said I never saw red used. You and your colleague other experiences. That's fine. If there was a wording problem, it was what you wrote.

I was told this by a man who was either retired or very close to it about 20 years ago. If he were 70 at that time, say, then he could have been a 20 year old young accountant 70 years ago. Which means he could be relating events prior to your oldest accountant's experiences.

I can appreciate your doubts.

But, there's no doubt in my mind that I was told what I'm saying. Always the case, I know, that my memory is failing me, but I really doubt that, too.

I really doubt, too, that someone was playing a joke on me or anything like that. That just isn't consistent with the gentleman as I knew him at the time. Still conceivable though.

Thanks for your thoughts. I'll check back every so often to see any new findings from all of you.

Thanks.

Hay

I think your source was just pulling your leg. And probably laughing when you bought it.

Question for historians: DID Bob Cratchit actually use red ink?

sushipup, you're a consistent source of cool wisdom and insight.

I don't doubt you friend believed it, as you obviously do. But that doesn't mean he was correct, as humans, we love it when life wraps up into neat and relatable packages, even more so when they are humorous or ironic. When given these explanations we tend to give them more credence.

You were told this by a friend whose word you are choosing to trust over several people who doubt it. It isn't hard to think that if your friend heard it from someone he trusted just as much that he didn't verify it, only repeated it. If you really want to know, then email Snopes.

Just checking in.

"You were told this by a friend whose word you are choosing to trust over several people who doubt it."

The problem with that is that I have absolutely NO REASON to doubt my friend. He's not a liar. He's not playing a joke on me. He's old enough and educated and successful enough and lived in the accounting world for all his working life. Could I still be wrong about something? Of course.

The friend knows this first hand.

Or go with, "several people who doubt it."

I can appreciate the doubts, but, at the same time, no one, yet, is able to show me where and how this practice began. I have my doubts about your doubts.

I'll check back in. I'd love to see an answer either way. Doubting is easy.

I do appreciate your comments.

Hay

Office Excel Cell 2007 Formatting offers four different choices: -1234, 1234(red ink), (1234), and (1234)(red ink) as choices for negative numbers.

The problem with that is that I have absolutely NO REASON to doubt my friend. He's not a liar.

The problem with that is that we gave you several reasons to doubt your friend. So while you may choose not doubt your friend you certainly have a reason to do so. You may even decide your friend the better source but that doesn't change the fact that you had a reason to doubt. In this, you were wrong. That doesn't make you a liar. I find that people are unintentionally wrong a lot, but not necessarily liars.

"The problem with that is that we gave you several reasons to doubt your friend.

Reasons like,

"Sounds like silly nonsense."?

Reasons like,

"I'll bet the style originated in the handwritten days of bookkeeping so that that sign is easier to spot and less likely missed. "

Reasons like,

"I honestly have no idea, but it sounds far too ridiculous to be true. I asked a colleague who is an accounting history buff and she has never heard it, and also found it far too coincidental to be true.

I assume that red is..."

Thanks for your comments.

If anyone ever comes across the origins of < and >, let me know.

Anyone have perhaps a copy of an accounting statement existing prior to, say, 1926 when you say Maine & Grant's "Wise-Crack Dictionary talks about red as a means of showing losses?

Obviously they had printing presses back then and I can well imagine that it would have been a lot easier to print one color than two. So, <and> would have made a lot of sense then.

You ever see pre 1926 accounting statements?

Thanks.

Hay

The use of red ink in accounting ledgers long pre-dates the 1920s.

No idea of when/why brackets came to be also accepted.

1912 Cite