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\begin{array}{l}\phantom{16)}\phantom{1}\\16\overline{)38}\\\end{array}
Use the 1^{st} digit 3 from dividend 38
\begin{array}{l}\phantom{16)}0\phantom{2}\\16\overline{)38}\\\end{array}
Since 3 is less than 16, use the next digit 8 from dividend 38 and add 0 to the quotient
\begin{array}{l}\phantom{16)}0\phantom{3}\\16\overline{)38}\\\end{array}
Use the 2^{nd} digit 8 from dividend 38
\begin{array}{l}\phantom{16)}02\phantom{4}\\16\overline{)38}\\\phantom{16)}\underline{\phantom{}32\phantom{}}\\\phantom{16)9}6\\\end{array}
Find closest multiple of 16 to 38. We see that 2 \times 16 = 32 is the nearest. Now subtract 32 from 38 to get reminder 6. Add 2 to quotient.
\text{Quotient: }2 \text{Reminder: }6
Since 6 is less than 16, stop the division. The reminder is 6. The topmost line 02 is the quotient. Remove all zeros at the start of the quotient to get the actual quotient 2.