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This study reports the development of an online four-tier test comprising 32 mathematics problems used to examine 982 students’ understanding of numbers and operations. Findings showed that the four-tier test is a reliable and valid instrument for assessing students’ performance, prevalent misconception, and confidence level more accurately and effectively. With relatively high confidence, most students had low number sense and held some prevalent misconceptions. Students’ confidence level associated with the reasons-tier was significantly higher than that associated with the answers-tier, suggesting the importance of mathematical reasoning in a testing instrument. Such a design or format of a four-tier test can be utilized and/or developed for assessing and detecting variations of students’ content knowledge, explanatory knowledge, and conceptual understanding.