Business entity concept or Separate entity concept or Separate economic entity concept are different names for the same concept.
According to business entity concept, the business is distinct and separate from its owners i.e. business and its owners should not be treated as one and the same thing.
Accepting this concept means that the activities performed by the business/organization does not have anything to do with the owner of such business/organization and same goes for the owners where any activity undertaken by the owner does not have anything to do with the business.
In technical terms it suggests that assets, liabilities, income and expenses of the business should be kept separate from the assets, liabilities, income and expenses of its owners. Business can own an asset on its name. Business can incur an expense under its name. It can have a liabilities under its name and liabilities of the business does not mean this is to be paid by the owner of the business. A car used for business purposes is the business’ asset. Where car used by the owner for his use is owner’s asset and these two cars should not be treated under same category or classes of assets.
However, students must not confuse separate entity concept with separate legal entity concept which became two different concepts originating from the same source because of the differences in accounting and legal approach.