Know when revenue should be recognized (i.e. recorded in the journal) according the accrual basis accounting rules. 1. 2. Know the order of items in a multi-step income statement - what is the correct or dee presenting/ discontinued operations, extraordinary items gains or losses, income from continuing operations, the cumulative effect of changes in accounting principles and net income. Check the model income statements presented in the chapter and in templates handed out. Know what kinds are events are reported as Extraordinary items and what the requirements are for an event to be considered extraordinary according to GAAP 3