Drop-down list based on the given file: how to create such helpful and neat list?

Hello!

I have a file from this website https://www.vertex42.com
and there are few very interesting functions and formulas.

The first question is about the beautifully constructed drop-down list, and I can't decipher how they did that.
I am attaching a modified (much shortened version) for convenience. On the tab Transactions there are these lists in columns A and G.
A's list depends on categories listed in tab Accounts, and G's list depends on categories listed in tab Categories.

If you put a mouse on any cell, say A5, or G7, you will see up and down arrows at the right edge of the cell, and clicking on these arrows you can choose a desired category.

How is it created? It looks really neat, let alone very helpful. I will be grateful for your help on how to create exactly the same list.

Thank you very much!