A workbook is the MS Excel file in which you enter and store related data.
A worksheet (also known as a spreadsheet) is a collection of cells on a single "sheet" where you actually keep and manipulate the data.
Each workbook can contain many worksheets. (It's a lot like a book. One book contains an entire story. Each page of the book contains part of the story.)
Often one workbook has a single theme, such as a personal budget. Each worksheet would then have a part of the theme, such as the budget broken down by month.