Basic Question

It seems like a basic question to me at least.  When using any method of 
encryption and you're going to decrypt something, how does the encryption 
method know that you've got the right password/key?  Is there something 
stored within the file, that when you enter your key it says "yes, that is

correct"?  If you're given an encrypted statement and told to decrypt it, 
how do you know you've done it correctly unless you're told that it is 
correct(assuming it's not plain text and extremely visible)?

Just a thought.

Thanks for any enlightenment.