Question

Explain the difference between relative reference and absolute reference.

Answer 1

Basis	Relative Reference	Absolute Reference
Meaning	It is a cell reference that automatically changes when a formula is copied or dragged to another cell.	It is a cell reference that remains completely fixed and constant, no matter where the formula is copied.
Use of Dollar Sign ($)	It does not contain any dollar signs (e.g., A1).	It uses dollar signs before both the column letter and row number (e.g., $A$1).
Behaviour During Copying	Adjusts its position relative to the row and column move (e.g., copying A1 down one row changes it to A2).	Stays locked to the exact same cell coordinate (e.g., copying $A$1 down one row still remains $A$1).
Default Setting	It is the default cell reference type used by Excel whenever you type a formula.	It must be manually created by adding dollar signs or by pressing the [F4] shortcut key.
Accounting Application	Best used for calculating independent row items sequentially, like finding Gross Profit for multiple rows using (Sales - Cost).	Best used when every row needs to multiply by a shared fixed cell, such as calculating Tax for all items using a single fixed Tax Rate cell.