Ever wonder why your engine on your boat has a terminal block? More commonly called the "barrier strip", its purpose is to provide a disconnection point between the engine wiring and the dash wiring. This is so that you can leave the engine wiring intact and easily disconnect the dash wiring in the event that the engine needs to be pulled out, saving time and headaches.
I have attached two diagrams of how a barrier strip is typically wired. Some boats use a 7 position strip while others use an 8 position strip. The only difference being that the 8 position strip allows a connection for the alternator's "Charge" wire, but quite honestly I see no reason for the alternator to be connected to the strip since it does not run to the dash, so a 7 position strip is perfect if you're replacing your wiring or wiring up a brand new boat.
Of course...this is the way it has been done since the first jet boat was created. A more modern way of doing it is by using a 7 pin weatherpack connector. It's much quicker to disconnect than having to unscrew 7 wires from a barrier strip, and it keeps your connections sealed from the elements unlike a barrier strip. Weatherpack makes 'pigtails', which are the connector with wires already crimped internally that you spliced into your existing wiring. If you know how to solder and heat shrink, I recommend going this route so you wont have to buy any special crimp tools to assemble the connector. The pigtails come in 1, 2, 3 and 4 pin style. You can use a 4 way and a 3 way connector to connect all 7 wires. If the alternator originally connected to the barrier strip, I would just run an 8AWG wire from the charge terminal to the battery + terminal to correct this.
In the diagrams you will see that one side of the strip is the "Engine" side while the other side of the strip is the "Dash" side. These diagrams show what wire is what from left to right as you're looking at the back side of the engine while standing behind the transom.


7 Terminal Block
Engine Side:
Terminal 1 (ground): This wire is a short wire that runs to the engine block. The negative terminal of the battery connects to the block, so by running a wire from this terminal to a bolt on the engine block will connect this terminal to the negative side of the battery.
Terminal 2 (battery +): The wire from this terminal can be connected to one of 3 places. You can either run it straight to the battery's + terminal, or the battery + terminal on the starter, or if you're running an aux solenoid you can run it to the terminal on the solenoid that connects to the + terminal of the battery. I run an aux solenoid so this is the way I have mine set up.
Terminal 3 ("S" terminal on starter): This terminal runs directly to the terminal labeled "S" on the back of the starter bendix, or to the coil on the aux solenoid. When running an aux solenoid, the "S" terminal of the starter will receive power directly from the battery when the aux solenoid is switched on by this wire.
Terminal 4 (Ignition + voltage source): This wire depends on the ignition system you're running. Basically this terminal only has power on it when the ignition switch is in the "On" or "Run" position. We call this the "Hot In Run" terminal. I have listed a few of the common ignitions to give you an idea:
HEI: Goes to the BAT+ Terminal on distributor
Points Ignition: Ballast resistor which connects to the + terminal of ignition coil
MSD R2R Distributor (no box): Red wire on distributor
MSD Box: Red wire on 6 pin weatherpack connector
Terminal 5 (oil pressure sending unit): This terminal connects to the screw terminal on the top of the oil pressure sending unit.
Terminal 6 (water temperature sending unit): This terminal connects to the screw terminal on the top of the water temperature sending unit
Terminal 7 (tachometer signal from ignition): This wire depends on what ignition you're running. I have listed a few to give you an idea:
HEI: Runs to the "Tach" terminal on the distributor cap
Points type ignition: Runs to (-) terminal of the ignition coil
MSD R2R Distributor (no box): To (-) terminal of the ignition coil
MSD Box: The box will have a seperate wire for the tach signal...that wire runs to terminal 7. You may need a tach signal adapter, which MSD supplies, depending on what brand of tach you're running. Check MSD manual for your particular ignition for more information
Dash Side:
Terminal 1 (dash ground): This terminal connects to a master ground wire, preferrably of a heavier gauge (10AWG or bigger). This wire will be the master ground feed to all the dash mounted accessories.
Terminal 2 ("BAT" terminal of ignition switch): This terminal connects straight to the "BAT" terminal of the ignition switch and should be of heavy gauge (10AWG or bigger). This wire is the master power feed for all dash mounted accessories. This wire is constantly hot at all times. Any circuits that will receive power regardless of ignition switch position will be powered from this wire (i.e. bilge pump circuit).
Terminal 3 ("SOL" terminal of ignition switch): This terminal connects straight to the "SOL" terminal of the ignition switch. This wire only receives power from the "BAT" terminal of the switch when the key is in the "Start" position. This wire feeds power back to the starter bendix or solenoid to tell the starter to turn on.
Terminal 4 ("IGN" terminal of ignition switch): This terminal connects straight to the "IGN" terminal of the ignition switch. This wire receives power from the "BAT" terminal when the key is in the "On" or "Run" position. This wire supplies power to the ignition system (or an "On" signal to MSD box ignitions). Also, any circuits that receive power only when the key is on will be powered from the "IGN" terminal of the switch (i.e. gauge circuit).
Terminal 5 ("S" terminal on oil pressure gauge): This terminal runs to the "S" terminal on the back of the oil pressure gauge to connect it to the oil pressure sending unit
Terminal 6 ("S" terminal on water temperature gauge): This terminal runs to the "S" terminal on the back of the water temperature gauge to connect it to the water temperature sending unit
Terminal 7 ("S" terminal on Tachometer): This terminal runs to the "S" terminal on the back of the tachometer to connect it to the tach signal from the ignition