Yes visual refernces are essential. I was on my way back from Gib, where I'd made friends with a young lady whilst on holiday. I had scrounged a flight deck visit, and I asked if she could go forward too. As we stood looking out the front, the Channel Islands came into view, and the two flight crew were debating which one was which. Eventually they called the stewardess forward and asked her if she knew what Jersey looked like. When she confirmed the island in question was Jersey, the captain said 'ah we are on course then'.
As we returned to our seats, my new girlfriend said 'they were joking just then weren't they?'