Getting started with IDEA - IntelliJ IDEA in Action - page 13

Click the OK button when the proper directory is selected. You'll return
to the JDK & Global Libraries window, but a new Java version will be
listed in the left panel, and a list of the class JAR s will appear under the
Classpath tab in the right panel.

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The Classpath is the set of class directories and JAR files that make up the Java API
and its extensions. By default, IDEA includes all the libraries and extension JAR s
included with the JDK . If you need to add additional libraries, click the Add but-
ton to do so, but you should never have to do this for any standard JDK . You
should only include JDK -related libraries and extensions in this list. IDEA pro-
vides a different mechanism for configuring third-party shared classes (shared
libraries), as we'll discuss in chapter 4.
The Sourcepath tab tells IDEA where it can find the source code associated
with the class files specified in the first tab. You can specify not only directories
but also JAR files. IDEA will automatically extract and parse the source files from
the JAR file if specified. Including source files isn't required, but doing so
improves IDEA 's ability to provide inline help while coding.

Figure 1.6 The JDK Setup window. This window is used to define each of the target JDKs on your
local system. A target JDK is an installed JDK that can be used as the basis of an IDEA Java project.