What is the advantage of using cell references in formulas compared to entering constant values?

A cell reference (such as B4 or A1) points to the value stored in a specific spreadsheet cell instead of typing that value directly into a formula. When a formula uses a cell reference, the spreadsheet always reads the current value in that cell whenever it recalculates.

This matters for accuracy because most spreadsheet errors come from manually retyping the same number into several formulas. If a source figure changes, every formula built from a constant value must be found and edited by hand, and it is easy to miss one or to mistype a digit. A formula built on cell references updates automatically the moment the source cell changes, and the value only ever has to be entered once. This is why cell references improve formula accuracy by reducing how much data has to be typed manually.

A common misconception is that cell references simply make a spreadsheet easier to read. Readability is a side benefit, but the underlying reason examiners test this concept is the reduction in repeated manual entry, which is the direct cause of fewer transcription errors.

Examination reminder: when a question asks for the benefit of a spreadsheet feature, look for the effect on accuracy and maintenance, not just convenience.