The entire purpose of this very elementary knitting information is to teach the basic differences in yarn types and packaging available in the market. Yarn is packaged (or put up) in different forms, although the differences in yarn packaging shouldn’t have much effect on the yarn you choose, but the shape does determine how you work with them.
Balls are rounder and shorter, and are not wound to have a center pull end. Many of the popular yarns are sold in balls. If you try to pull from the center of a ball you will get a tangle.
A hank is a long loop of yarn that is twisted into a bundle. You cannot knit directly from a hank, you need to wind hanks into a cake or ball before you can use them.
A skein is similar to a ball, but it’s formed into a tubular shape. It’s the typical shape that most people think of when they think of yarn. Most of the yarn brands sell in this form Skein form as it is ready-to-use. It’s very common to hear the word ‘skein’ used to refer to ‘a unit of yarn’.
Donut Ball is center-pull, which distinguishes it from ‘balls’. It is used for packaging slippery luxury yarn that needs to boast its luster. The Donut Ball often depends on a label piercing its open center to give it structure, hence it falls apart once you remove the label and start knitting with it. Donut Balls need to be rewound into balls, without stretching the yarn, and then knit with it in that form.
A cake is what comes off of a ball-winder, a cylinder with a flat top and bottom. These bundles are center-pull, which means that you can pull the yarn from the center for knitting.