There are many files that are compressed into Rar/7zip/Zip Files format nowadays, from an album of music, or a set of photos to some kinds of comic book or an installation program.
Unfortunately, the Nexus 7's android 4.1 cannot open these compress files for non-root users. When this is the case, you would need to transfer the file to a computer then use the WinRAR software to extract it. After that, you have to copy the file back on Nexus 7, and then you can start to use it. This is annoying and wasting your time too.
The quicker way is to download a third party app ASTRO File Manager and use that app to extract the file directly on your device. You can install the ASTRO File Manager from Google Play store. This file manager supports Zip, Rar, Gz, and Tar file formats.
But if you want to extract the 7Zip or bzip2 format, the ASTRO File Manager can't no longer handle them anymore. So, use AndroZip File Manager instead. With AndroZip File Manager, you are now capable of copying, deleting, moving, searching, and organizing your files and folders logically. AndroZip File Manager also let you open the compressed files and uncompress them as well.
Both of these file managers also feature task killer and application manager. Now with the drag and drop function, it's easy to manage your files within a few taps.