As we've talked about in class and you've read about in the book, information is transmitted from the axon hillock (or action potential generating region) to the axon terminal by a particular type of electrical impulse known as the action potential.  This impulse is made possible by the opening and closing of channels that are selectively permeable to  charged particles - known as ions.  Although we can't easily measure the flow of these particles (actually we can, but that's another story), we can easily monitor the electrical changes which occur across the membrane over time.  This is made possible by using an oscilloscope - which is simply a voltmeter that monitors voltage as a function of time by sweeping a beam of electrons across the face of an oscilloscope.  One electrode is placed inside of the neuron and one electrode (a reference) is placed outside the neuron.  As the voltage difference between two electrodes (one in the neuron and one outside) changes, the beam is deflected in a systematic way.  If the inside becomes more negative, compared to the outside, the beam is deflected downwards.  If the inside becomes more positive, compared to the outside, the beam is deflected upwards.
 

Shown below is an oscilloscope trace (borrowed from Eric Chudler's web site) taken during the generation of an action potential.  It shows about 20 milliseconds of trace.  As the beam of electrons moves across the oscilloscope, there is an upward deflection of the beam which reflects an inward flow of sodium ions. Since sodium ions carry a positive charge,  the inside of the neuron at that site becomes positive when compared to the outside of the neuron.  As the sodium channels close (at about the peak of the action potential), potassium channels open and potassium ions (which are inside the neuron and also carry a positive charge) leave the neuron - this results in the downward deflection of the trace as the inside of the neuron in the vicinity of electrode becomes negative again.

Thought question to see if you're awake: Why would potassium ions leave the neuron when the channels open?  Is this an active or passive response?
 

The action potential that you see above is only reflecting electrical activity at a particular spot along the neuronal membrane (i.e., that point at which the recording electrode is inserted).  However, this impulse travels along the length of the axon.  What the neuron below is trying to show is how the impulse moves along the axon. The dendrites receive information from other neurons and this information can be either excitatory or inhibitory.  All of this incoming information is added together (spatial and temporal summation) and if there is enough excitation at the base of the axon, then the threshold for generating an action potential is reached and the action potential works it's way down the axon to the terminal.  The red line moving down the axon represents an action potential at each of those spots.
 

        dendrites & soma                axon and axon terminal