Basically, cable has a “hot” line to carry the current and a “neutral” line to complete the loop. They often have a third wire as that acts as a grounding wire.
Classified according to the number of wires it contains and their size or gauge.
All cables are marked with a series of letters followed by a number, a dash and another number. The letters indicate the type of insulation (cord, wire and insulation). The first number indicates the resistance of the wires in the cable, and the number following the dash indicates the number of individual conductors in the cable.
If the designator “G” follows the series it means that the cable is also equipped with a non-current-carrying ground wire. Hence, the designator USE 12-3/G indicates an underground cable containing three separately insulated wires capable of carrying 20 amps of current plus a grounding wire.
The most common jackets are NM-B (Non-Metallic Building Indoor), UF-B (Underground Feed) and BX, which is flexible metallic cable.
Two-conductor cable contains one black wire and one white wire. The black wire is always the “hot” wire and must be fused. The white is always neutral and must never be fused. When current bridges the gap from the 110V hot wire to the neutral, it results in a 110V input to the appliance.
Three-conductor cable contains a red wire in addition to black and white. The black and red wires are “hot,” carrying 110V each, and both must be fused. The white remains neutral. This three-wire circuit is increasingly common in home wiring; it accommodates major 220V appliances, such as ranges and air conditioners.
BX cable is armored metallic cable. It consists of two or three insulated wires individually wrapped in spiral layers of paper. The steel casing acts as a ground wire. There is also a bond wire included in the casing that acts as a ground if the casing breaks.
Romex® cable is a flat, beige thermoplastic jacket surrounding two or three wires. Each wire is wrapped in insulation and a spiral paper tape. Type NM means it can be used indoors. Type NMC means it can be used indoors or outdoors. Type UF means it is suitable for use underground outdoors.