The test is more commonly known as the Kanji Kentei (漢字検定), or the shorter Kanken (漢検).
The test examines not only one's ability to read and write kanji, but also one's ability to understand their meanings, to use them correctly in sentences, and to identify their correct stroke order.
Levels 10 through 4 are primarily taken by kindergarten to elementary school age (up to 12 years old) children.
Level 2 is as high as many Japanese, even those with higher education degrees, tend to go.
Kanji Kentei results are accepted by some educational institutions giving applicants / students additional bonus points for admission / credits.