I'm trying to record both what's happening on screen and the audio being played by the applications. To my surprise, QuickTime did not record the sound. I believe it worked before in previous OS X releases, but that is not something that I use often so I have not bothered to try earlier. What is the current situation on El Capitan? Have I messed with something that prevents QuickTime from capturing the sound, or has it never worked? Here is my view of Quick Time / New Screen Recording on a Mac Mini: On my Macbook Pro, I have the option select None or Internal Microphone.
Internal microphone actually records the speakers of the Mac Book as heard from its own microphone, which obviously sounds terrible. This is a MacMini 7,1 (late 2014) and there is nothing in Input Sources. You need to install in order to run it on El Capitan.
El Capitan requires kext to be signed in order to load them. This one gets its kext installed in /Library/Extensions/. This is due to Then, you have to create a multi-output device with: Audio MIDI Setup.app, which is found in /Applications/Utilities/: Finally, when you want to do the actual recording, make sure you use this multi-output device, and capture from the same Soundflower device used in this multi-output device. Otherwise, you can't both listen to and capture the sound, because it goes directly to soundflower without being copied to the built-in output. Alt/option + right clicking on volume gives you this menu: and Quicktime now looks like this. For those wanting to record their voice or the sounds coming from the speakers.
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No extra software is required. You just need to click the little arrow to the right of the record button and change it from None to Internal Microphone. Not sure why this is defaulted to None but I was caught by surprise when I changed from an old Macbook to a new one with a fresh OS install. Although it's not an ideal answer to the OP's desires, I'm leaving this answer here because it answers the question in the title. If you want to record the audio generated by your running applications etc. You will need to use SoundFlower or something similar. It's available free from the AppStore.
If your internal microphone is glitching out and you just want the system to recognise the hardwares presence again; try simply plugging some headphones or something into your 3.5mm TRRS audio jack. I had the same problem the other day and thought the actual soundcard was fried but just making that quick contact brought it straight back online.