ORIGINAL: Duckbutter48
I always thought you set it at the yardage you wanted the animal to come to before you shot it. Never got it to work correctly though.
Objective Lens Size
The second number in the formula (4x40) is the diameter of the objective or front lens. The larger the objective lens, the more light that enters the scope, and the brighter the image.
Ocular Lens
The lens closest to your eye.
Parallax
A condition that occurs when the image of the target is not focused precisely on the reticle plane. Parallax is visible as an apparent movement between the reticle and the target when the shooter moves his head or, in extreme cases, as an out-of-focus image. Bushnell center-fire riflescopes under 11x are factory-set parallax-free at 100 yards; rim-fire and shotgun scopes at 50 yards. Scopes of 11x or more have a special range focus to adjust for parallax.