The pattern of rhymes at the ending of each line in a poem is called a rhyme scheme. Letters (A,B,C...) are usually used to express which lines rhyme. Verses that are designated with the same letter are said to rhyme with each other. It is also known as an arrangement of rhymes in a stanza or a poem.
1. For easier understanding of the concept, let us take a famous nursery rhyme, written by Jane Taylor as an example.
Twinkle twinkle little star,
How I wonder what you are. 
Up above the world so high
Like a diamond in the sky.
We see that the first two lines rhyme with each other (star-are); the second two lines rhyme with each other (high-sky). Let us name each line as A, B depending on the words that rhyme with each other.
Twinkle twinkle little star,
How I wonder what you are. A
Up above the world so high,B
Like a diamond in the sky. B
It can thus be seen that, this poem follows AABB pattern.
Rhyme scheme of the poem "Team Work":
It’s all very well to have courage and skill
And it’s fine to be counted a star,B
But the single deed with its touch of thrillA
Doesn’t tell the man you are;
For there’s no lone hand in the game we play,
We must work to a bigger scheme,B
And the thing that counts in the world to-dayA
Is, How do you pull with the team?
They may sound your praise and call you great,
They may single you out for fame,B
But you must work with your running mateA
Or you’ll never win the game;
Oh, never the work of life is done,
By the man with a selfish dream,B
For the battle is lost or the battle is wonA
By the spirit of the team.
You may think it fine to be praised for skill,
But a greater thing to doB
Is to set your mind and set your willA
On the goal that’s just in view;
It’s helping your fellowman to score
When his chances hopeless seem;B
Its forgetting self till the game is o’reA
And fighting for the team.
It is seen that, this poem follows ABAB pattern.