Lossless audio files keep all the original sound data, so nothing is lost—common types include WAV and FLAC. Lossy audio files remove some data to make the file smaller, which can affect sound quality; examples are MP3 and AAC. Normalization adjusts the overall volume of an audio file to a target level without changing the dynamic range, while compression reduces the volume difference between the loudest and softest parts to make the sound more even.