Kinetic energy is associated with movement; potential energy is stored because of position or condition. Gravitational, elastic and chemical energy are common potential forms.
A transfer moves energy between objects or parts of a system; a transformation changes the form. A roller coaster transforms gravitational potential to kinetic as it descends. In a circuit, energy transfers from the source to components; lamps produce light and heating, while motors produce movement, heating and sound.
Energy is conserved: it is not used up. Less useful heating or sound remains in the account. In a Rube Goldberg machine, trace each step and the transfers to surroundings. Friction-based First Nations fire-starting knowledge is a culturally grounded example of kinetic energy transforming into thermal energy and should be taught respectfully using authoritative/local sources.