To sort by Item Number, you have to first set the "Sort Transaction Item By" to "Item Number".
Then make a New Order and print an Order report.
BED MATTRESSS = Bedroom
DIN - ROUND = Dinning room
FAN AIR CIRCULATOR = Living room
LAMP LIGHT-BLUE = Living room
LOVESEAT LILLBERG = Living room
You would notice that items in the Order report are properly sorted by Item Number. (Same case when you process the Order to Invoice and print the Invoice report)