An entity is a thing or object that has unique and independent existence and can be differentiated from all other objects on the basis of certain characteristics. E.g. person, building, machine etc.

Entities can be of two types:

1. Concrete Entity

2. Abstract Entity

1. Concrete Entity- If the entity has physical existence, then the entity is called ‘Concrete Entity’. E.g. person, bank etc.

2. Abstract Entity- If the entity does not have any physical existence, then the entity is called ‘Abstract Entity’. E.g. loan, holiday etc.