Business Object Type in SAP contains methods, attributes and events which give a component based view of any Business Process.
For example we have a Purchase Order business process. This process includes various small functionalities. It will have process of changing Purchase orders based upon requirements, functionality to retrieve the details of purchase order etc.
Each of these functionalities is encapsulated inside a method. The method can call the function modules present in R3 system or can have there own code to execute some functionality. So if we consider Purchase Order as a Business Object then it will be identified by key field Purchase Order number.
Each purchase order business object based upon key field purchase order number is different. It’s so because each purchase order is different and will contain different details.
So the methods contain business functionality. Attributes are just like properties of the Business Object. For example for any purchase order Purchasing Group, Purchasing Organization etc are attributes.
Technically we can say that business object types are just like any template. At runtime we instantiate or create runtime objects for any BO (Business Object) type based upon the key fields we pass.
Two runtime Business Objects of same BO type are different from each other based upon the key fields we pass. So the key field is the differentiating factor for two or more runtime Business Objects of same BO type.
To Browse for BO open tcode SWO2 (Path -> Tools ->ABAP Workbench->Overview>Business Object Browser).
You can expand the nodes and can check various Business Objects in BOR. You can double click on the BO node and it will take you to BO display (SWO1).