Turning on versioning control for Office 365's SharePoint Online libraries or lists is as easy as a few mouse clicks. Here’s how you do it:
From your document library, click the Library tab on the Ribbon and go to Library Settings.
Under General Settings, click Versioning Settings.
From the Content Approval group, select either Yes or No to indicate whether or not a document needs to be approved first before it comes visible to the site users.
From the Document Version History group, choose from one of the options for tracking version history.
From the Require Checkout group, select either Yes or No.
Select No if you are going to use the library for coauthoring.
Click OK.
After versioning is enabled, you can view the version of your document by selecting the check box to the left of the document name and then clicking the Version History icon from the Ribbon.
From the list of version histories, you can view or restore previous versions by clicking on the down arrow to the right of the date and then selecting either View, Restore, or Delete.
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Source:http://www.dummies.com/how-to/content/how-to-enable-versioning-control-for-sharepoint-on.html
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