It is easy to configure versioning for a list. To open the versioning settings page, simply open the list settings page for the list or library and select the Versioning settings.
Navigate to the list or library
Select the Library tab on the Library Tools ribbon
Click the Library Settings button
The Library Settings page displays. Click the Versioning Settings link located under the General Settings heading
For complete details, see: How does versioning work in a SharePoint list or library