Stored procedures vs. functions

Most of the times in the interview we usually be asked this question.

Somehow I got to know the basic answer that we should know.

In many instances you can accomplish the same task using either a stored procedure or a function. Both functions and stored procedures can be custom defined and part of any application.
Functions, on the other hand, are designed to send their output to a query or T-SQL statement. For example, User Defined Functions (UDFs) can run an executable file from SQL SELECT or an action query, while Stored Procedures (SPROC) use EXECUTE or EXEC to run. Both are instantiated using CREATE FUNCTION.

To decide between using one of the two, keep in mind the fundamental difference between them: stored procedures are designed to return its output to the application. A UDF returns table variables, while a SPROC can't return a table variable although it can create a table. Another significant difference between them is that UDFs can't change the server environment or your operating system environment, while a SPROC can. Operationally, when T-SQL encounters an error the function stops, while T-SQL will ignore an error in a SPROC and proceed to the next statement in your code (provided you've included error handling support).

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