Difference between AdWords and AdSense

This is a commonly asked question and yet sometimes poorly answered, so here's the long and the short.

Google AdWords

Google AdWords allows you to create advertisements which appear in Google search results and/or on Google display partner websites. Each time someone clicks on your advertisement you pay Google some Benjamins :) With Google AdWords you pay Google.

Google AdSense

Google AdSense enables website owners (as well as YouTube channel owners) to display Google AdWords advertisements on their websites/channels. Each time someone clicks on one of these advertisements you receive some Benjamins :) With Google AdSense Google pays you.