The purpose of citing references is to give the reader enough information to identify and get access to the sources you have used. This makes it easier for them to check the validity of your arguments. The other reason for citing is to acknowledge your sources and give credit where credit is due by showing which words, ideas, figures, images, etc. within your paper you took from another source than your own research.
Referencing has two elements:
The in-text citation refers to a full citation given in the reference list following the text. The reference list contains all the references that has been cited in the text.
There are basically two referencing systems: author-year (or parenthetical or Harvard) system, and number (Vancouver) system. The details of how to reference and write reference lists vary depending on the discipline, organization and publication. Always find out which reference style you are supposed to use.
In author-year (or parenthetical or Harvard) system the complete citations are provided in alphabetical order in a reference list or bibliography. The sources are listed in alphabetical order by surname of the first author name.
Image source: Ylimäki, M. (2017). Methods for image-based 3-D modeling using color and depth cameras. Oulu: University of Oulu.
In number (or Vancouver) system the in-text citations are indicated as numbers. The references are then listed in numerical order, and in the same order in which they are cited in text. If you repeat a reference to a source several times in the text, it retains the number of the first occurrence. The number system works best when there aren't too many references.
The reference list can also be numbered in alphabetical order, and the in-text citations are indicated with those numbers. Alphabet-number system helps the reader to find citations also in a long reference list.
Image source: Viittala, H. (2017). Selected methods for WBAN communications : FM-UWB and SmartBAN PHY. Oulu: University of Oulu.