It's completely up to you how you do your questions and answers really.
And, if your picking out a word I think you should already be reading from a sentence anyway.
I say this because it takes a lot more work to pick a random word, and then go out hunting for a sentence you understand grammatically, so if you are already reading something and a word or sentence takes your interest, then you already have it right in front of you.
The way I do it is put a whole sentence into the question box, with all the kanji, and the in the answer box I copy paste the same line from the question, but in brackets I put the kanji's readings.
If there are any new words in the sentence (There may not be any new words if you are just adding it in as a new grammar point) then I go to
国語辞典 英和辞典 和英辞典 - goo辞書 or any other online 国語辞典 and look up the word I don't know, then use the definition in the answer box to remind myself of what the word means.
If I don't understand the definitions then I have to turn to a Japanese to English dictionary.
You can try if you want, to write out your own interpretation of the sentence in Japanese, in the answer box too, but sometimes this can be quite difficult especially if your just using the sentence as a new grammar point.
If you feel you need to then use English in your SRS if you want, there's nothing stopping you, and if it helps you out without blatantly giving you the answer without having to think a bit then why not.
Another way I get sentences is from watching a lot of drama.
At the moment I'm watching through 銭ゲバ I don't understand it all but that's ok, if there is a sentence or word that I feel I want to know then I can head over to
http://www.dramanote.com/ and look at the script there to find out what they said, and then repeat the steps for adding a new sentence.
Some people also try to go from kana only in the question box, then write out the answer using kanji on paper, and check there answer that way, but i prefer just having the whole sentence with kanji in the question box and readings in the answer.
Anyway, this is how
I do it, and it works for my own way of learning,
don't be afraid to change the method either, hopefully it's given you some idea of how you could do it, but
you have to do what works for you.
And remember if you get stuck looking for anything written by native Japanese, you can always use
Google