What is the difference between stocks and bonds?

Answer 1

This is a broad overview and how I would tell my accounting students the difference in the two.

1)Stocks are a way for people to "buy" into the company. Essentially it's investing with the return on the investment being a dividend.

2) A bond is an agreement between the company and the entity purchasing the bond that the company will pay back the amount usually at the end of the term plus pay interest in fixed intervals. The interest is the return on the investment