From what I can gather, this equipment is used to demagnetise (degauss) heads on tape to tape recorders amoungst (presumably) other equipment.
This link gives some clues as to the wheres and why-fores
How you check it I have no real idea - presumably with another piece of test equipment. I haven`t been able to fond a manual for the Fostex unit but I did find one for a RadioShack item which may give a clue click here
Hope this helps.