Note: This test is applicable only for 3-5 ohms 12V single lead externally grounded ignition system.
To set up the test, remove one spark plug wire from its plug, then remove the spark plug using a spark plug socket. Next put the spark plug back into the spark plug wire.
Holding the plug wire with insulated pliers, find a spot on the engine that is a good and easily accessible grounding point. Pretty much any exposed metal, including the engine itself, will do.
Holding the spark plug wire with your pliers, touch the threaded portion of the spark plug to the grounding point. Crank the engine with the key, and look for a bright blue spark to jump across the spark plug gap. If you see a nice, bright spark (clearly visible in daylight) your coil is doing its job.