Which type of file stores historical data for reporting and analysis?

• A. Master file
• B. Transaction file
• C. Archive file
• D. Reference file

Answer: (C)

Storing historical data for reporting and analysis is the function of an archive file. Archive files are designed to preserve past records after they are no longer needed for daily operations, so you can run historical queries, trend analyses, and regulatory or management reports without cluttering active systems. This separation also helps performance by keeping older data accessible but outside the current transaction and master data sets. In contrast, a master file contains current master data used in ongoing processing (like active customer or account records), a transaction file holds a batch of current period transactions to be processed, and a reference file provides static lookup data used during processing. The archive file is the one specifically intended for long-term retention and analysis of historical data.