How does screenreader read images

A screen reader will notice that there is an image on the page, and will attempt to read any alt-text you have set. At the end of the alt-text it will say the word "image" or "graphic." So for example, if you have an image of a heavily-trafficked street, you might set the alt text to say "a busy city street." A screen reader would read "A busy city street, image."

You set alt-text in a couple of ways, but it may be easiest to right-click on the image and enter your text in the alt-text box. You need to do this for every image, graphic, and text box in your course. 

If the image is purely decorative - doesn't add anything to understanding the content - then you should uncheck the "Object is visible to accessibility tools" checkbox. See the attached screenshots for what I am talking about.