When you talk about digital components, like proximity switches, a “source” component supplies power on its terminals and responds to the change in the load. A “sink” component, on the other hand, does not supply power to its terminals and responds to changes in the voltage or current impressed upon it as measured on those terminals.
In 4-20mA loop parlance, I could understand a “source” component as one which supplies the loop power such as a powered 4-20mA output card in a PLC rack, or a 4 wire pressure transmitter that provides the loop power from its internal power supply.
Likewise, I could understand a “sink” component as a passive receiver instrument such as a 4-20mA input card on a PLC, or one of the gazillion 1/4 or 1/8 DIN panel meters on millions of pieces of equipment in factories.
But that leaves a gap for a couple of pieces. In loops which have a 24VDC loop power supply rather than having power supplied by the transmitter, I certainly wouldn’t think of that as “source” instrument despite the fact that the PS is obviously supplying the EMF. Likewise, for a loop powered 4-20mA pressure transmitter you couldn’t call it a “source” instrument if the criteria are that it should supply loop power since it doesn’t supply the power. However, I also wouldn’t call it a “sink” instrument, since it isn’t a receiving instrument.
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Complex topic but clear explanation