Hi mchips,
Essentially, you're correct. The ambient temperature is taken into account and put into a formula relating the measured voltage, the voltage at the thermocouple junction, and the measured voltage at the cold junction. That equation and details on how CJC is calculated can be found in this Developer Zone document under the "Thermocouple Measurement and Signal Conditioning" heading:
Taking Thermocouple Temperature Measurements
Regards,
James R.
National Instruments
