/etc/passwd lists all users. One per line, in the format {username}:{password}:{user-id}:{user-info}:{path-to-user's-home-directory}:{path-to-user-shell-program}
useradd [options] username
On most systems, creating a user account automatically creates a group with the name of that user.
/etc/groups lists all user groups. One per line, in the format {group-name}:{password}:{group-id}:{comma-separated-list-of-users-in-group}
groups command lists groups a user is a member of. e.g. groups eric