The source neutral wire on the receptacle is removed and spliced to the white running to the switch, and to a pigtail back to the receptacle neutral. At the switch, the neutral wire is needed to power some dimmer switches and is now required in most switch boxes.
Back at the source, the white neutral wire is spliced to the white from the fixture cable and to a pigtail, back to the receptacle neutral terminal. At the fixture the white connects to the neutral terminal on the light. The hot terminal on the light is connected to the red wire from the switch loop cable and the other end is connected to the top terminal on the switch.
This circuit breaker wiring diagram illustrates installing a 20 amp circuit breaker for a 240 volt circuit. The 12/2 gauge cable for this circuit includes 2 conductors and 1 ground. A dedicated 20 amp circuit like this is used for heavy household appliances like an air conditioners.
This drawing shows the wiring for adding a new light fixture using an always-hot receptacle outlet as the source. New cable is run from the receptacle to the new fixture location and a switch loop cable is run from there to the new switch location.