
In the world of computers, source code is the set of written instructions that tell the computer what to do! This is how humans tell the computer what it has to do! The source code is very much like a language except every word has a defined meaning to the computer. The computer does exactly where it is told to do. If the instructions are not complete or they ask the computer to do something impossible then the computer gives an error message and the program stops.
The source code instructions are normally in a form that is easy for humans to work with, but the computer converts the source code instructions to a form which it can follow.
Source code comes in different forms. The more English-like is high-level code and languages such as COBOL use English-like phrases e.g. MOVE x TO y. In this case x is a literal, a number, the result of a calculation, a variable (a variable is a value that is not known until the program is run. This often comes from the data being processed by the computer, for example people's name, addresses, bank balance, etc.) The variable values are determined when the computer processes the individual account).
Machine code is also source code but these programs are not normally used by the vast majority of programmers! It makes more commercial sense for them to use the high level programming languages.
The high level source code is translated into machine code before it can be run on the computer. Either the whole of the source code is translated into machine code before the program is run (COBOL is an example of this), or each complete high level instruction is translated into machine code when the programis being run. Commonly used examples of the latter include PHP and ASP programming languages.
Software is a term that generally refers to a collection of computer instructions that does a specific job. A payroll program, a graphics program, any collection of computer instructions that do a certain, can each be called software.
Some software programs are free to use, others need to be purcheased.