As with any other form of writing, when working with sources it is important to find your own voice and weave your evidence into that. Your coursework should not just be a compilation of all the ideas you have found - it should be your own original ideas backed up by evidence. The best way to understand how to use sources in your writing is to read a wide range of academic books and papers and notice how other scholars do it. However, here is a quickstart guide to get you going.
Imagine you are working with this source:
Direct quotation:
If the exact words are important, you may choose to quote directly. Often the most natural way to do this is to refer to the author by name in your sentence, but you can also use the quote as part of your sentence and name the author in brackets at the end. If you quote directly from a source with page numbers, you must give the page number.
Salmose (2014) suggests that “[t]his mystification of Gatsby is an important part of creating narrative movement and progress” (p. 67).
or
A sense of mystery surrounding Gatsby is generated at the start of the novel, as his “background and economic enterprises [are] purposely obscured through repeated narrative frequency” (Salmose, 2014, p. 67)
If you do quote directly it is important to comment in some way on the quotation to explain how it advances your argument.
Summary or paraphrase
If the ideas are more important than the exact words, you may choose to rewrite them in your own words. If your rewrite is roughly the same length as the original then it is called a paraphrase, if it is much shorter it is called a summary, but both are treated in the same way for citation purposes. In this case a page number is not necessary (but you can add one if you want to).
Salmose (2014) notes that Fitzgerald creates an air of mystery around Gatsby by having a number of different characters tell different versions of his backstory, and suggests that this has an important role in drawing the reader into the flow of the story in the early part of the novel.
Note that it is not acceptable to paraphrase by taking the original sentence structure and changing a few words. This is a form of plagiarism.
e.g. "Gatsby's background and economic enterprises have been purposely obscured through repeated narrative frequency by having the information being retold and repeated with different content by several characters" should not be rewritten as Gatsby's past and business dealings have been deliberately hidden through repeated narrative frequency by having stories about him told differently by different characters.
At first glance this doesn't look too bad, but the problem is that this writer has just taken another writer's sentence and substituted the odd word (see below). It is possible to do this without having any understanding of the original sentence and this is not an acceptable way to paraphrase at this level.
If you need to stick this closely to the original sentence structure, then you should just quote directly. The best way to paraphrase is to read the sentence or paragraph you want to paraphrase and then cover it up and rewrite the ideas in your own words. That way you are less likely to produce incorrect "pseudoparaphrases" like the one above.
Citing indirect sources
Sometimes a text you are reading quotes another text. In an ideal world, if you want to use ideas from this second text you should track it down and read the original, but in many cases this may not be practical. Do not pretend you have tracked down the original source if you have not. Instead, acknowledge the source as an indirect citation:
could be referred to like this:
Kundu describes the world of the early chapters of The Great Gatsby being “made gorgeous by the magic touch of a romantic imagination” (cited in Salmose, 2014, p.67)
or
The early chapters of The Great Gatsby could be described as having been “made gorgeous by the magic touch of a romantic imagination” (Kundu cited in Salmose, 2014, p.67)
There is no way to produce this effect in brackets in Word's citation tool - just type it. However, you must make sure that you import the 'Salmose' source into your citation manager with the others so that it appears in your bibliography even though, as far as Word is concerned, it is not referred to directly in your essay in am embedded citation.