A really quick example, I am sure someone else can explain the physics behind it better. In this image the search light has double sided glass in the front, and a mirror in the back. To render this correctly, it needs 5 ray trace bounces, one for each side of the glass when the light enters, one for the mirror bounce, and one for each side of the glass for the light coming out of the search light. 

This is an extreme example where you will need five bounces. In water, you need one bounce for the light entering the water, one for the bottom of the water area, be it sand or beach or pool bottom, and one for the light coming out of the water. So for good water you will need a minimum of three bounces, otherwise your refraction and transparency will not be physically accurate.

OK, now someone else will explain the physics of the render engine behind this.

Your specialist military, sci-fi, historical and real world site.