Carat refers to stone weight while karat refers to fineness of gold.
The weight of a diamond is measured in carats. This is the easiest factor to determine. However, two diamonds of equal weight may have a very unequal value, depending on their cut, color and clarity. Quality is not determined by weight alone. Diamonds, today, are weighed using the metric system and the resulting weights are still converted into the carat as the unit of Diamond weight.