Working: The electric generator works on the principle of electromagnetic induction and Fleming's right hand rule is applied to determine the directon of induced current in the coil.
The axle is rotated in clockwise direction, magnetic field is from N to S pole. So, applying Fleming's right hand rule to this situation, we get a current moving in a clockwise direction or from A to B as per the diagram.
Now, when the coild turns through half cycle or it's half rotation, side CD will face N pole of the magnet. But, now the current direction on this side i.e. for CD it is C to D, which is opposite to the direction of A to B in the coil.
The rotation in the coil is continuous and fast enough. The process of reversing of current happens in every half cycle of the rotation of the coil. The current in the external circuit is continuous due to slip rings and brushes.
The type of current which reverses it's direction of flow for every half cycle is known as an AC current.
The current generated will be maximum when either of the sides AB or CD faces the poles. The main idea of generation of current in the coil is that it should cut the magnetic field lines which are passing from N to S pole of the magnet. This phenomena we call it as Induced emf.
In simple words, AC current is positive in first half cycle and negative in second half cycle.