Hello Sparky2003,
Svereral people here have answered your question correctly already. The following is another & possible more simple explanation.
Sourcing means the positive of a DC supply is being switched to the load. In a sourcing circuit the load is perminantly connected to the negative supply. The switching element of optic sensor, proximity sensor, limit switch etc is connected to the positive of the supply. When it is activated (switched) it makes the positive connection to the load.
Sinking means the negative of a DC supply is being switched to the load. In a sinking circuit the load is perminantly connected to the positive supply. The switching element of optic sensor, proximity sensor, limit switch etc is connected to the negative of the supply. When it is activated (switched) it makes the negative connection to the load.
Sourcing and sinking circuits can be produced using either NPN or PNP transistors. To generalise an say (for example) that all sourcing circuits are PNP would in fact be incorrect.
I hope the above helps.
Regards,
GGOSS