Can anybody provide me with crystal clear difference between method's parameter and argument. How both of them work ?

They are used interchangeably, and no one except the most pedantic of people will chastise you for using them to refer to the other. But, here are the correct usages of each: Take this bit of code for example:

public static void main(String[] args){
    m1(4, "test");
    m2('A', 5.6);
}

public void m1(int number, String string) {
}

public void m2(char character, double decimalNumber) {
}

In this bit of code you have 3 methods (main, metho1, method2). Each method declares its parameters inside the parentheses where they are declared (lines 1, 6, and 9). Matching these parameters is absolutely required to correctly call the method. Now on lines 2 and 3 is code that calls the m1 and m2 methods. To correctly call a method you must use the method name and pass arguments inside parentheses that match the method parameters. So the parameters of m1 are (int, String) and on line 2 i pass in (4, "test") (and int and a String) which match the method parameters. This code works, however if I changed that line to:

m1(4);

The code would fail because the arguments passed into the method of an (int) do not match the parameters of (int, String). On line 3, where I call m2 I pass the arguments ('A', 5.6) which are a char and a double, and this code works because those arguments match the parameters of the method which are (char, double). So: Parameter(s) - these are inside the parentheses of a method declaration Arguments(s) - these are inside the parentheses when a method is called and MUST match the method's parameters.