What is SObject?
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A sObject is any object that can be stored in the force.com platform database.

Apex provides a generic sObject abstract type to represent any object.
for eg. 

    Vehicle is a  generic type whereas car, bike, etc are concrete type.

Similarly, sObject is generic whereas account, Custom_Object__c, or any Standard or Custom object are in concrete type.
eg.

List<sObject> obj = new List<sObject>();

So here, as the generic type is sObject, so we can add any type of object to this list (i.e. Standard / Custom Objects).